topic HSA Excess with additional tax in Deductions & credits

HSA Excess with additional tax

corpcpa — Tue, 14 Jul 2020 23:52:10 GMT

We file Married joint return. Both are over 55. I contribute to HSA Plan. Employer contributes $100 monthly. My contribution is set to make up difference to maximum contribution. In our case $3,500 each and $1,000 for being over 55 for a total of $8,000. W-2 Box 12 code W= $8,000.12. My return is calculating excess contributions. It doesn't make sense to me. Do i need to re-characterize some of that contribution of 6,800 i made (contributions personally made not through your employer)?

Re: HSA Excess with additional tax

BillM223 — Wed, 15 Jul 2020 00:17:19 GMT

What kind of HDHP coverage do you have? Family or Single (yes, you each could have separate HDHP policies from different employers).

Do you have just one HSA or two (you each could have one, because they are owned by the individual)?

You have a code W amount of $8.000? Did you put any of that on the second line on the screen headed "Let's enter [name]'s HSA contributions"? All contributions reported on the W-2 are considered the "employer contribution", and you are not to enter any part of this amount into the "personal" contribution line. So if you entered $6,800 on that line - that's your issue.

Besides, you want it to work this way - the code W amount is removed from Wages in boxes 1, 3, and 5 before your W-2 is printed. This means that not only do you not pay federal income tax on this amount, but you don't pay Social Security or Medicare taxes on it either. This is a tax break that most taxpayers are unaware of.

Re: HSA Excess with additional tax

Anonymous — Wed, 15 Jul 2020 00:38:13 GMT

if you have a family plan and only you have an HSA a/c the max you and your employer can contribute for 2019 is $8000. since your employer is putting in $1200 that means through salary reductions (your taxable wages are reduced) you can only put in $6800 or 566.67 per month. this is reflected in your W-2 because code W show's $8,000 (the 1200 the employer put in and the 6800 you put in through salary reductions). you do not enter any contributions that you put in through salary reductions on line 2 of the form. they're handled through code W on the W-2. for code W on the w-2 eliminate the .12 cents.

does your spouse have her own HSA a/c? there is no such thing as a joint a/c.

if she doesn't the entire $8000 will be reported on your 8889.