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New Member
posted Jun 1, 2019 6:50:30 AM

How do i pay taxes on over paid HSA funds?

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1 Best answer
Level 13
Jun 1, 2019 6:50:31 AM

If you are talking about paying the 6% penalty on excess contributions carried over to next year, this amount is calculated on form 5329 and is automatically carried to line 6 on Schedule 2 of your 1040.

If you are talking about having to pay income tax on the excess contributions, note that the excess amount is automatically added to line 8 (Other Income) on Schedule 1 (1040), so it is added to your taxable income.

 

[Edited 4/2/2020 11:26 am CDT - updated for 2019]

4 Replies
Level 13
Jun 1, 2019 6:50:31 AM

If you are talking about paying the 6% penalty on excess contributions carried over to next year, this amount is calculated on form 5329 and is automatically carried to line 6 on Schedule 2 of your 1040.

If you are talking about having to pay income tax on the excess contributions, note that the excess amount is automatically added to line 8 (Other Income) on Schedule 1 (1040), so it is added to your taxable income.

 

[Edited 4/2/2020 11:26 am CDT - updated for 2019]

New Member
Jun 1, 2019 6:50:33 AM

so what your saying is i don't need to worry about paying the taxes on the excess contributions and its already calculated into my taxes? i was refunded the excess amount so i shouldn't be penalized.

New Member
Jun 1, 2019 6:50:34 AM

i looked at my 1040 and line 21 had the excess amount filled in.

Level 13
Jun 1, 2019 6:50:35 AM

Then you are good to go...oh, note that next year, when TurboTax asks you if you "overfunded" your HSA in 2017. answer "no"...because you "cured" the overfunding when you withdrew the excess.