One of the purposes of the HSA interview is to determine
your annual HSA contribution limit.
As you probably know, the maximum limits in 2017 are:
-
$3,400 - individual
with self-coverage
-
$6,750 - individual
with family coverage
- If the HSA owner is 55 or
older, then you add $1,000 to these amounts.
However, these limits assume that you were in an HSA all year. If you
left the HSA during the year or started Medicare or had one of a number of
change events, then the limit is reduced.
There are several major culprits for excess contributions (other than
just actually contributing more than the limit).
First, if you did not complete the HSA interview - that is, go all
the way until you are returned to the "Your Tax Breaks" page - the
limit still might be set to zero, causes a misleading excess contribution
message.
There are questions all the way to the end of the interview that affect the
annual contribution limit. This is what Lisa 995 is referring to.
Second, it is not unusual for taxpayers to accidentally duplicate
their contributions by mistakenly entering what they perceive to be
"their" contributions into the second line on the "Let's enter your
HSA contributions" screen (see screenshot below).
Normally, any employee who made contributions to his/her HSA through a
payroll deduction plan has the contributions included in the amount with code
"W" in box 12 on the W-2. This is on the first line on this screen
(above).
Note that the IRS considers any contributions made through payroll deduction
to be an “employer contribution”, not a personal contribution. Don’t worry,
your contribution was already removed from boxes 1, 3, and 5 on your W-2, so
you won’t pay income tax on the amount.
Third, if you weren't in the HSA all 12 months, then the annual
contribution limit is reduced on a per month ratio.
