Hi,
Thank you for your reponse, extremely helpful. I do have some follow up questions on Option 2 and 3.
For Option 2 that stated above. How does this work? Turbo tax says that I need to remove $4,000 so I will keep as is. Let's say that I will have medical expense for $1,200. You said that I can use " expected medical expenses over the next several months. Define "several months"? Is there a time limit as far as using 2025 medical expense? How about medical expense that I paid out of pocket in 2024, can I use this expense as well?
Lastly, how do I associate the $1,000 (money taken out from 2024 HSA contribution) to the potential $1,200 (expense from 2025 tax year)? Is this acceptable to do from a tax law stand point? Do I need to enter anything in Turbo Tax for 2024 tax season? Do I need to do anything in Turbo Tax for 2025 tax season to explain this?
For Option 3 you stated below: ...applying "personal" contribution (line 2, 8889)... Is this something I should do in Turbo Tax for 2025 Tax year and not for 2024 Tax year?
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You can try to carry over the $1,000 to 2025, if you will have HDHP coverage with no conflicting coverage. The $1,000 would be applied as a "personal" contribution (line 2, 8889). You would need to reduce your planned HSA contributions by $1,000 so that you would not perpetuate the excess, which will be more expensive to fix.
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Thank you in advance for your help on this.
