topic HSA Contribution in Deductions & credits

HSA Contribution

BudgetNuts — Sat, 11 Mar 2023 22:49:39 GMT

Hi, I have a question pertaining to doing a after tax HSA contribution to lower my taxes. I have 2 separate HSAs. One from my old employer and one from my current employer both. I contributed 2400 in total on the my current employer HSA (my contribution and employer total). I want to contribute to the old employer HSA since no contributions can be made pretax. When I entered the amount of $4000 my taxes due only reduced by about $900. Wouldn't the full $4000 come out of the calculated tax due? Is there somewhere specific I need to add it in turbotax for it to calculate correctly?

Any insight would be appreciated. Thanks

Re: HSA Contribution

Bsch4477 — Sat, 11 Mar 2023 22:57:58 GMT

What type of plan do you have? Contribution limit applies to total contributions to all plans.

For 2022, if you have self-only HDHP coverage, you can contribute up to $3,650. If you have family HDHP coverage, you can contribute up to $7,300.

Re: HSA Contribution

BudgetNuts — Sat, 11 Mar 2023 23:12:50 GMT

Hi ....they are both family plans. I think I can contribute a total (which includes adding up both plan contributions) of $7300.00. When I add $4000 (which would be for the non-employer plan), the $4000 doesn't come off of tax owed should it?

Re: HSA Contribution

Bsch4477 — Sat, 11 Mar 2023 23:22:22 GMT

Your contribution doesn’t come off of tax owed. It is an adjustment to income and deducted from your other income thus reducing your AGI and the amount of tax you pay at your marginal tax rate. You can see the adjustment on Schedule 1 line 13. That carries over to line 10 of your 1040.

Re: HSA Contribution

BudgetNuts — Sat, 11 Mar 2023 23:41:52 GMT

OK that makes sense. Thanks so much.

Re: HSA Contribution

Mike9241 — Sun, 12 Mar 2023 01:44:22 GMT

the HSA is a deduction, not a tax credit so if you contribute $4K to a family plan and are in the 22% bracket your taxes will only go down $880.

Re: HSA Contribution

BudgetNuts — Sun, 12 Mar 2023 01:46:06 GMT

Thank you