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Deductions & credits
Your choices are to tell the HSA company that you made an excess contribution and ask them to make a return of excess contribution (even though you made no excess contribution; I am not advocating this), or pay the 10% recapture with your 2018 tax return for failing to remain an eligible individual through the testing period.
[Ignore the following paragraph. The 10% recapture is in *addition* to income tax that must be paid on this amount in 2018.]
Note that the 10% recapture tax will be less than the income tax you would pay as a result of the return of excess contribution if your marginal income tax rate for 2017 is above 10%. For most people, there is no monetary advantage to fraudulently requesting a return of excess contribution when they made a proper HSA contribution under the last-month rule.
[Ignore the following paragraph. The 10% recapture is in *addition* to income tax that must be paid on this amount in 2018.]
Note that the 10% recapture tax will be less than the income tax you would pay as a result of the return of excess contribution if your marginal income tax rate for 2017 is above 10%. For most people, there is no monetary advantage to fraudulently requesting a return of excess contribution when they made a proper HSA contribution under the last-month rule.
‎June 3, 2019
6:03 PM