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Retirement tax questions
I assume that "no" was the answer to my question asking if you were under age 59½ at the time of the distribution. If so, it makes little sense to do an HSA Funding Distribution because the main purpose of an HFD is to avoid an early-distribution penalty on the IRA distribution. After age 59½ there is no early-distribution penalty no matter what you do with the money distributed from the IRA.
Simply indicate to TurboTax that this money was not transferred to an HSA and enter a regular personal HSA contribution for 2023 of this amount when you prepare your 2023 tax return next year. The IRA distribution will be taxable on your 2022 tax return but the HSA contribution will be deductible on your 2023 tax return.
April 10, 2023
12:47 PM