BillM223
Expert Alumni

Retirement tax questions

I am not sure what you are trying to say, but this is how HSAs work.

 

Contributions:

Your employer can make contributions to your HSA or you can through payroll deduction. The amount (together) is reported on your W-2 in box 12 with a code of W. This code W amount is removed from Wages in boxes 1, 3, and 5 before your W-2 is printed. This is the tax benefit of this kind of contribution - the amount is never reported as part of your income at all.

 

You can also make direct contributions to your HSA. Any contributions made this way are reported on line 13 of Schedule 1 (1040) as an adjustment to gross income.

 

Your contributions are limited to an annual amount determined by the type of HDHP policy you have times the number of months you have it (and no other conflicting insurance). Any amount more than this annual HSA contribution limit is considered "excess" contributions. NOTE: your excess contributions have nothing to with how much you have spent out of your HSA. HSAs are not like FSAs in which you have spend all the money contributed for the year or lose it. Instead, the amount in the HSA rides from year to year until you spend it.

 

Am I right in guessing that TurboTax is telling you that you have excess contributions and you don't see how since you have spent nearly everything in your HSA? If so, as you can see from the previous discussion, the excess is due to contributing more than the annual HSA contribution limit for you.

 

If this does not make sense, then come back and tell us what kind of HDHP policy you have, which months that you had it, if you are 55 or older, and how much was contributed to your HSA by you, your employer, your spouse, or anyone one else eligible on the planet.

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