How to answer HSA question

[jscheg]

Trying to answer the initial medical coverage coverage.

Husband has an HSA via work that covers the family.  Wife does not have an HSA via work.  At the question "Tell us about the health-related accounts you had in 2019", do I check the box for husband and wife or just the husband?  (The wife was technically covered by the HSA.)

[VictoriaD75]

Only check the husband's name if he is the owner of the HSA.

On the page where you should see the question, “What type of High Deductible Health Plan did [spouse] have on December 1, 2019?”.  The choices are Family, Self only, or None. 

If you have been covered under your husband’s family plan, you might think you should answer Family to the question.  However, the answer should be None. 

It is referring to what type of plan you held in your name on December 1, 2019.  If you had your own separate HDHP on that date,

then choose the type of plan that you had.  If instead you were covered under the plan in your husband’s name, then you should choose None.

In 2019, the contribution limits are $3,500 and $7,000 respectively for self-only and family plans.

The most common error I see when entering HSA contributions are double reporting. Typically, these payroll contributions are reported on your W-2 in box 12 with code W. If that is the case, no other contribution needs to be reported in the software.

Under the Deductions & Credits menu, confirm the following:

• Expand the menu for Medical
• Click Start/Revisit next to HSA, MSA Contributions
• Confirm the account ownership and click Continue
• Continue in through the screens until you reach Let's enter your HSA contributions
• Stop here. If all of your contributions were through payroll deductions and reported on your W2, do not enter anything on this screen. If that is the case, either leave the box empty or type $0 in the box next to Any contributions you personally made

[Opus 17]

Here's a couple more things you should know. 

The HSA account is only ever owned by one person, like an IRA.  There is no such thing as a "joint" HSA.

To contribute to an HSA, the owner must be covered by a qualifying high deductible health plan and have no other medical coverage (certain limited exceptions apply).  The amount the owner can contribute depends on whether they have single or family coverage.

However, because your spouse has a family HDHP, that means you are also allowed to contribute to an HSA in your own name as if you had a family HDHP insurance (as long as you don't also have some other form of disqualifying medical coverage).  Your overall family limit is still $7000 (or $7100 for 2020) but you can divide that any way you want.  For example, your spouse could contribute $5000 to an HSA through his work and you could contribute $2100 to a private HSA.

There are many banks that will allow you to open private HSAs, although they may charge a monthly maintenance fee. It is slightly more tax-advantaged to contribute through work, since you save social security and medicare tax as well as income tax.  However, there might be other reasons why you would want to split your money up in separate accounts. 

If you or your spouse is age 55 or older, you get an additional $1000 "catch-up" contribution allowance, but this must be contributed to your own HSA only.  In other words, if you and your spouse are both over 55, your overall family contribution limit is $9100 for 2020, but your spouse's personal limit is $8100, because your catch-up amount can only be contributed to an account you own in your name.