Your employer contribution reported on your W2 is part of your CONTRIBUTION- this is the amount that went in the account. The 1099SA is the DISTRIBUTION- this is the amount that came out. (As long as you used the distribution for medical expenses it is not taxable.) The difference of $158 is still in the account and you can use it now or in future years and it will be added to any additional contributions. Most HSA do not require you to use all the money in one year, you can keep it in the account until you need it.
If your return contained an excess contribution to an HSA, then Form 5329 was included in your return. Did you remove the excess last year in time not to be penalized? Check your 2018 tax return and verify the excess was reported. If it was, you will find the form in your return.
Thanks for your response. The 5329 was not included with my return and the excess was not removed. I don't understand why the form did not generate. The question I now have is do I report the $158 in excess on my 209 taxes if the form did not generate?
Form 5329 is created only when you did not withdraw the excess contribution before the due date of the return.
Normally, when TurboTax tells you about the excess contribution and you tell TurboTax that you will remove it, the excess is added to Other Income (so it is taxed) and that is the end of it - no 5329.
You get 5239 as Dawn said only when you tell TurboTax that you did NOT intend to withdraw the excess by the due date of the return.
NOTE: if you withdrew the excess before the due date of the return last year, then when TurboTax asks you this year if you overfunded the HSA last year, answer NO. When you withdrew the excess, you "cured" it. TurboTax should really ask "Did you carry over any excess HSA contributions from last year to this year?"
I understand you to say that you had an excess contribution of $158 in 2018, and you did not withdraw it before the due date of the return. You also do not have a form 5239 in your 2018 return.
If so, please go look at line 21 on Schedule 1 of the 1040 on your 2018 return. Is the $158 there, with a description of HSA or Health Savings Accounts or something similar? If so, you told TurboTax that you would withdraw it.
Before I go too much farther, come back and clarify this for me...
Thank you. I totally understand your explanation. I checked schedule 1 and there was nothing on line 21. Does it make a difference if the employer was the one to contribute to the HSA? They contributed 1,275 and I received a form 1099sa showing a gross distribution of 1,117 the difference being 158.
Your employer contribution reported on your W2 is part of your CONTRIBUTION- this is the amount that went in the account. The 1099SA is the DISTRIBUTION- this is the amount that came out. (As long as you used the distribution for medical expenses it is not taxable.) The difference of $158 is still in the account and you can use it now or in future years and it will be added to any additional contributions. Most HSA do not require you to use all the money in one year, you can keep it in the account until you need it.
I contributed $3900 to my HSA. It is a family HSA. But turbo tax said I had excess contribution. I checked that it was a family plan for the whole year.
The 3,900 is the max for family. Did you receive a form with the amount of contribution and enter the information in the appropriate line? Also one mistake I made in the past was entering the contribution from the form and then reentering it under an MSA which is entirely different from an HSA.
TurboTax is telling me that I have an excess contribution, even though I only contributed $3280 and filed as single.
As a single, self-only HSA owner, $3500 is your maximum contribution. It appears you have not exceeded. Usually the issue is double entry of the contribution amount. To check:
1. "Edit" HSA section
2. Click through the interview questions being sure that the HSA box for you is checked
3. When you get to page titled "Let's enter XXX HSA contributions", be sure not to double enter the contributions.
If the contributions are on your W2 and entered already, you should enter zero (0) in the box for "any contributions you made".
4. Eventually you will get to page titled "Was XXXX covered by ...HDHP in 2019?"
5. Be sure to answer "Yes"
6. That will prompt a question about whether plan was "family, self-only, or different plan types"
7. Select "Self-only"
I believe there is an error in the 2019 version of TurboTax. I got the same message, but my husband and I are over 55. We have individual HSA accounts. We should be able to contribute $3500 each ($7000 family) plus an extra $1000 each since we are over 55. Our total contribution was $6600 but TurboTax was telling us we needed to withdraw ~$4500!! And the totals did include the employer contribution!
Be sure to only enter amounts in the box for "any contributions you made" if they are in addition to the employer contributions from W2 box 12 coded "W". Be sure when you answer the questions for taxpayer and spouse that you each only made contributions to "your own individual HSAs" and they are each "self-only".
Thanks! I had imported the W-2s and then typed in the contributions so I had doubled the contributions. This was not immediately obvious until I went back through.
My HSA is set up where excess is auto rolled over every year but turbo tax won't let me file it keeps going back to the form showing I have an excess and need to withdraw it. Frustrating. What am I missing?
I am sorry for the size of this reply, but I believe that you are misunderstanding what is happening.
HSA are persistent financial vehicles, in that money that is unspent at the end of the year is carried forward to the subsequent year. In this case, we don't use the word "excess" because that word has a specific (negative) meaning.
An "excess contribution" is when you contribute more money to your HSA than your annual HSA contribution limit. When TurboTax tells you that you have an excess contribution, this is what it means. It does not refer to how much you took out of the HSA nor how much you have in the HSA at any given time.
You can withdraw this excess without penalty if you tell TurboTax "yes, I will withdraw the excess" and you contact your HSA custodian BEFORE APRIL 15TH to request of "withdrawal of excess contributions" (use this exact phrase).
If your excess contributions came through your employer (whether contributed by your employer or by you using payroll deduction), the HSA custodian will send you a check for the amount to be withdrawn. TurboTax will automatically report this amount as "Other Income" on Schedule 1 (1040).
Having said all this, it is possible to accidentally indicate to TurboTax that you had an excess contribution when maybe you didn't. Please read the following situations to see if any of them appliy to you.
One of the purposes of the HSA interview is to determine your annual HSA contribution limit.
As you probably know, the maximum limits in 2019 are:
However, these limits assume that you were in an HSA all year. If you left the HSA during the year or started Medicare or had one of a number of change events, then the limit is reduced.
There are several major culprits for excess contributions (other than just actually contributing more than the limit).
First, if you did not complete the HSA interview - that is, go all the way until you are returned to the "Your Tax Breaks" page - the limit still might be set to zero, causes a misleading excess contribution message.
There are questions all the way to the end of the interview that affect the annual contribution limit.
Second, it is not unusual for taxpayers to accidentally duplicate their contributions by mistakenly entering what they perceive to be "their" contributions into the second line on the "Let's enter your HSA contributions" screen.
Normally, any employee who made contributions to his/her HSA through a payroll deduction plan has the contributions included in the amount with code "W" in box 12 on the W-2. This is on the first line on this screen (above). Don't enter the code W amount anywhere on the return other than on the W-2 page.
Third, if you weren't in HDHP coverage all 12 months, then the annual contribution limit is reduced on a per month ratio. NOTE, this means that you have to indicate when and under what type of HDHP plan you had. Be sure to answer the questions on the screen entitled "Was [name] covered by a High Deductible Health Plan in 2019?"
Fourth, if you had a carryover of excess contributions from 2018, then this carryover is applied to 2019 as a personal contribution, which could cause an excess condition in 2019 as well. But note: if you had an excess contribution in 2018 but cured it by withdrawing the excess in early 2018, then do NOT report an "overfunding" on your 2018 return.
Fifth, the Family limit ($7,000) is for the aggregate of contributions by both taxpayers, even if both taxpayers have their own HSAs. That is, one taxpayer can’t contribute $7,000 to his/her HSA and the other contribute $3,500 to the other HSA – the $7,000 limit applies to the aggregate of all HSA contributions credited to the family (in this case, the excess contributions would be $3,500).
I have an HSA in 2019, but TurboTax says it is all taxable because I WAS claimed as a dependent on my parent’s return. However I WASN’T claimed. I could have been claimed by them. I answered the applicable questions correctly in Gen Info. Other tax software (Taxslayer and IRS Free File) got it correct. How can I get TurboTax to do it right?
The question about whether you can be claimed on another person's tax return is part of the Personal Info in TurboTax.
Please review that section to answer that you cannot be claimed on another person's tax return and you were not claimed on another person's tax return.
Looks like I blew it in 2018 taxes and entered my company's contribution into the "you personally made" box. This resulted in a tax.
Q1: how do I fix that?
Also this seems to be carried over into 2019 taxes, and is trying to charge me again for an excess contribution.
Q2: How do I fix that?
Never tried filing a corrected TurboTax return.
You have to amend the return for 2018 to correct the error. You can follow these instructions to do that:
1. Log into your TurboTax program
2. Find "Your Tax Return & Documents" on your home page
3. Click on the "Show" option
4. Select the year you want to amend
5. You will see an option to "Amend(change)" the return for that year.
6. Just follow the instructions to start the amend process.
What you do is go back to the entry that you made incorrectly and then change it. You will be asked to type an explanation of why you are amending the return. Once you are done, you must print the return out, sign it and mail, along with a check for any tax due.
For 2019, just indicate that you didn't make an excess contribution for the previous year, since you corrected that with the amended return.
In 2018 I received an ESOP of $10,237 that I rolled over into an IRA. I turned 71 in Dec. 2019. It seems like only $6,500 was accepted, and $3,737 is considered excess. I paid a tax on that $3,737 last year. Also, in 2019, I withdrew $1,113 from my IRA.
I"m doing my tax on Turbo Tax Premium and am being hung up on this. What entry will I make in the Retirement section for 2019? I think the excess is $2,624 ($3737-$1113= $2624) I tried to enter that next to the $10,237 2018 entry, but it didn't work. I really need help.
4/13/20 Thanks, everyone. I found the problem and corrected it. IRS accepted the return. I had made a mistake on the 2018 tax. I had to amend and now waiting for refund.
So I made an Excess contribution because I did not understand that my entire family had to meet the family maximum contribution of $7000. My husband as a single high deductible insurance holder under the age of 55 made a contribution of $3500 to his HSA account in 2019, and I made a contribution of $7000 as a family high deductible insurance holder under the age of 55 into my HSA account in 2019. I understand the mistake now, I wish I understood it before, but I am working with the HSA service provider and have submitted the Excess Contribution form to withdraw $3500 plus interest before 4/15 from my account. They told me that should be process by the end of the week, and it will take a little longer for them to issue a 1099SA, but they will issue a corrected document.
I have not filed taxes yet assuming I need the 1099SA before I do, or at least it seems safer, but my question is during 2019 I had withdrawn more than $3500 from HSA; therefore, I will get the Excess contribution amount of $3500 plus interest back as other income, the new 1099SA will state that my 2019 contribution was $3500, but is it going to be a problem if the withdrawn amount for 2019 is something like $4200? Or based on the fact that the excess $3500 is being withdrawn before 4/15, is it going to be like the extra $1200 came out of there so in the end it does not matter?
I hope my question makes sense. I asked my HSA service company, but they told me that they cannot answer any tax related questions.
When you withdraw excess contributions, you get a 1099-SA with a distribution code of '2', and the earnings in box 2. Please don't try to calculate the earnings yourself - you can't (only the HSA custodian can do it).
When you get this 1099-SA,(it may be next year), then enter it into TurboTax, and the earnings will be added to Other Income.
If TurboTax reported to you this year that you had excess contributions, then this amount has been automatically added to Other Income on Schedule 1. You don't need a 1099-SA to report this.
Did you really withdraw $4,200 as the excess contribution? If so, that was wrong. If your excess that TurboTax told you about was $3,500, then that's all you should have asked the HSA custodian to withdraw. As I said above, don't guess at what the earnings are and withdraw. An HSA is not a savings account where you can willy-nilly withdraw money.
If you did withdraw $4,200 but your excess was only $3,500, then you have two choices:
1. find $700 in medical bills that were incurred after the start of the HSA that you paid with after tax dollars and document that the $700 withdrawn was for these bills.
2. Tell TurboTax that you had a $700 distribution that was not for qualified medical expenses. This will be taxed and hit with a 20% penalty.
I am not sure at this point that I fully understand your situation, so tell me if I got it right, and we can talk about the $700.
Sorry I was not clear, my gross distribution for 2019 was $4200. I contributed a total of $7000, so my excess contribution was $3500. I was worried because in the end I was supposed to contribute $3500, but my distribution was $4200. I have sent in a request for withdrawing the $3500 excess contribution and I am aware that the HSA agency will figure out the interest earned.
The contribution limit has nothing to do with the distributions that you did (or did not) take. You may leave funds in the account year to year without penalty.
You and your employer are only allowed to contribute a set amount to the HSA each year ($3500, by your calculation). Anything over that limit will be declared as income and have an additional 6% excise tax added to that, each year, until corrected.
Your employer can ask for their contributions back, or if you made the contributions, then you can ask for them back. I believe the cutoff is the end of the tax year.
AlanMcR, above, is correct. Distributions and contributions are totally different issues; one has nothing to do with the other.
When you get your Form 1099-SA reflecting your excess contributions, enter it into TurboTax, as is. Do not change any of the data when inputting.