Retirement tax questions

Sort of, but it depends on what you have already done.

 

First, you cannot withdraw the excess without penalty past the due date of the return. As Kat noted, IF you filed for an extension, then the due date is October 15, 2019; otherwise, the due date that you had to beat was April 15, 2019.

 

If, by chance, you did not withdraw the excess in time, then the total amount of the excess is put into Other Income (line 21 on Schedule 1) and you pay normal income tax on it. Whose HSA is dinged for the excess depends on how you answered TurboTax when it told you that there was an excess contribution and which HSA has the excess (could be both).

 

Let's pretend that TurboTax told you that your excess contribution was $7,900 (but more on that later because that's actually not right), and that you said that the entire excess was due to your HSA. This creates a carryover of excess contributions for you (if you did not withdraw them) to 2019. In 2019, the carryover will be applied to your HSA as a "personal" contribution. If you make NO OTHER contributions in 2019 to either HSA, then the amount carried over will be taken as a deduction in 2019, thus reducing your income again. In short, the only downside is that you paid a 6% penalty and got the deduction a year late.

 

That is, you contributed the $7,900 in 2018 to your HSA, it's still in your HSA because you didn't withdraw it, but you didn't get the deduction until 2019. This is absolutely not obvious, so please ask questions if you need to.

 

NOTE: if you have a carryover, TurboTax will automatically apply it to the next year. Therefore, you must reduce your normal HSA contributions to keep the total amount of the next year's contributions under your limit. Otherwise you just perpetuate the excess and get dinged 6% again.

 

NOTE NOTE: if you are both 55 or over and both have HSAs, then the actual 2018 limit was $8,900, not $7,900. The catch is that you both get the $1,000 "catch-up", but the catch-up must be contributed to your own HSAs. The remaining $6,900 can be divided up any way you like (like putting it all in his as you did).

 

So while your husband could have contributed $7,900 to his HSA, you still should have been able to contribute $1,000 to your HSA. In fact, you could divide up the $8,900 anyway you like between the two HSAs, so long as each HSA gets at least $1,000.

 

Since I don't know what you have actually done to this point, I can't be sure of the best advice, but please come back and tell me where you are at return-wise, and we'll figure it out.