Turbo tax said I over paid HSA and I need to contact my health insurance and withdraw that money. I never heard of this before. What does this mean?

emoninor18- — Thu, 06 Feb 2020 02:07:59 GMT

Re: Turbo tax said I over paid HSA and I need to contact my health insurance and withdraw that mo...

VictoriaD75 — Thu, 06 Feb 2020 02:57:45 GMT

In 2019, the contribution limits are $3,500 for Self-Only plans and $7,000 for Family. $1,000 catch-up contributions were allowed for taxpayers over age 55.

The most common error I see when entering HSA contributions are double reporting. Typically, these payroll contributions are reported on your W-2 in box 12 with code W. If that is the case, no other contribution needs to be reported in the software.

Under the Deductions & Credits menu, confirm the following:

Expand the menu for Medical
Click Start/Revisit next to HSA, MSA Contributions
Confirm the account ownership and click Continue
Continue in through the screens until you reach Let's enter your HSA contributions
Stop here. If all of your contributions were through payroll deductions and reported on your W2, do not enter anything on this screen. If that is the case, either leave the box empty or type $0 in the box next to Any contributions you personally made

If it turns out you did have an excess contribution, the following applies. Generally, you must pay a 6% excise tax on excess contributions. See Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. The excise tax applies to each tax year the excess contribution remains in the account.

You may withdraw some or all of the excess contributions and avoid paying the excise tax on the amount withdrawn if you meet the following conditions.

You withdraw the excess contributions by the due date, including extensions, of your tax return for the year the contributions were made.
You withdraw any income earned on the withdrawn contributions and include the earnings in "Other income" on your tax return for the year you withdraw the contributions and earnings.

Pub 969 Tax-Favored Health Plans

Re: Turbo tax said I over paid HSA and I need to contact my health insurance and withdraw that mo...

Critter — Thu, 06 Feb 2020 03:10:37 GMT

The HSA is handled in 3 parts in the TT program :

First the contribution:

https://ttlc.intuit.com/replies/4557768

https://ttlc.intuit.com/replies/4785646

Next the limitations screen to confirm you are eligible to make the contributions:

Until you complete the HSA portion of the TurboTax interview to establish your eligibility for an HSA contribution, TurboTax will treat the amount entered on the W-2 form as an excess HSA contribution.

https://ttlc.intuit.com/replies/4788059

And lastly any distribution:

https://ttlc.intuit.com/replies/4787864

topic Turbo tax said I over paid HSA and I need to contact my health insurance and withdraw that money. I never heard of this before. What does this mean? in Deductions & credits

Turbo tax said I over paid HSA and I need to contact my health insurance and withdraw that money. I never heard of this before. What does this mean?

Re: Turbo tax said I over paid HSA and I need to contact my health insurance and withdraw that mo...

Re: Turbo tax said I over paid HSA and I need to contact my health insurance and withdraw that mo...