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cas
Level 1

Another HSA and Medicare Question

My spouse and I were covered by an HSA (family plan) through August 2019.  I started Medicare in Sep 2019. So my max HSA contribution is (7000+1000)*8/12 = $5333. My spouse then started a self-only HSA in Sep 2019.  TurboTax says my max contribution is $5333. Okay on that.  But it then says my spouses max contribution is $6833. Where did it come up with that number?

 

If I enter a contribution over $2166 for my spouse, TurboTax says there is an excess contribution. So which is the max contribution $6833 or $2166?

1 Best answer

Accepted Solutions
BillM223
Employee Tax Expert

Another HSA and Medicare Question

If you are referring to the button "Calculate Max Contribution limit", this calculation doesn't handle Family coverage well in the sense that when you calculate the maximum for one spouse, it doesn't factor in the other spouse.

 

Thus, for you it calculates as if your spouse didn't matter and ditto for your spouse. 

 

This results in claiming that you have a $5,333 limit and your spouse having a $6,833 limit. The $6,888 would be correct for your spouse - if you didn't exist and took none of the Family coverage limit.

 

But the way it really works is that the two of you split the $7,000 a month for 8 months. You get 8/12ths of your $1,000 "bump". Your spouse gets 100% of his/her $1,000 IF you spouse has his/her own HSA (since he/she was covered for every month, even if under different coverage), and your spouse gets 4/12ths times $3,500 for September through December.

 

So $2,167 is correct for your spouses coverage IF you took all the Family coverage from January through August AND if your spouse has his/her HSA.

 

Make sense?

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View solution in original post

3 Replies
BillM223
Employee Tax Expert

Another HSA and Medicare Question

If you are referring to the button "Calculate Max Contribution limit", this calculation doesn't handle Family coverage well in the sense that when you calculate the maximum for one spouse, it doesn't factor in the other spouse.

 

Thus, for you it calculates as if your spouse didn't matter and ditto for your spouse. 

 

This results in claiming that you have a $5,333 limit and your spouse having a $6,833 limit. The $6,888 would be correct for your spouse - if you didn't exist and took none of the Family coverage limit.

 

But the way it really works is that the two of you split the $7,000 a month for 8 months. You get 8/12ths of your $1,000 "bump". Your spouse gets 100% of his/her $1,000 IF you spouse has his/her own HSA (since he/she was covered for every month, even if under different coverage), and your spouse gets 4/12ths times $3,500 for September through December.

 

So $2,167 is correct for your spouses coverage IF you took all the Family coverage from January through August AND if your spouse has his/her HSA.

 

Make sense?

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

cas
Level 1

Another HSA and Medicare Question

Yes, I finally worked out the math myself and came up with the $2167 limit for my spouse since I am contributing my max of $5333.  I just found TurboTax very misleading. Maybe they will consider improving this section by also showing how one spouse's contribution affects the other spouse.

 

By the way, TurboTax actually computes $5334 for me and $2166 for my spouse.  I guess a dollar here and there is due to rounding errors.

BillM223
Employee Tax Expert

Another HSA and Medicare Question

"By the way, TurboTax actually computes $5334 for me and $2166 for my spouse.  I guess a dollar here and there is due to rounding errors."

 

This is probably the case. When you multiply $7,000 by 8/12ths, you get $4,666.67. When you multiply $1,000 by 8/12ths, you get $666.67. If you do the rounding now, you add $4,667 to $667, and you get your $5,334.

 

TurboTax tends to round early in most processes, so this is the likely explanation.

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