HSA

[hahari]

I have family HSA and my wife has her own HSA.  My contribution to my HSA was 2400 and my employer 800 for a total of 2400 (as in my W2-12)

My wife's contribution was 1850 + 600 from employer for a total of 1850.  Our total contribution was 4250.

when filing joint and fill up the HSA section, it comes back that we have over contributed to our HSA by 2838 and which one to treat as the over contributer.   Our joint limit should be 7000 for which we are under.  and it si taxing me 6% on the 2838.  am I doing something wrong.  I dont think so.  have done it 10 times and it si the same every time.  HELP.   thanks

[Critter-3]

Did you enter the box 12 code W from the W-2 forms  AND  again in the HSA section ?   If so you doubled the contribution which is giving you this error.   If so remove the duplicated entry ... you may also want to delete the W-2 forms and enter them again. 

[hahari]

tht is exactly what I did.  I had the numbers form my W2 AND then added what portion of it was paid by me directly in the HSA box. the numbers add up. 

Thanks.  It looks like to solved my issue.  Ill redo that section. 

[hahari]

if I may ask one more question. 

So I corrected the HSA and there is no longer the over paid message. but strangely when I had 2868 dollr over pay on which I had to pay 6% tax, my tax due was 2073.   once I fixed the HSA I expected the Tax due to go down as I no longer have to pay 6% on the 2838 mistaken HSA over pay.  When I remove my over pay first the tax due goes down.. good.   but when I remove my wife's duplicate over pay, the tax to my surprise went up to 2223. which is even higher than when I had to pay 6% on the over pay..  I am I dont something else wrong here?? 

thank you SOOOO much for your help. 

[AnnetteB6]

Be sure that as you go through the HSA section under Deductions and Credits that you have answered all the questions about High Deductible Health Plan coverage for both you and your spouse.  If all of those questions have not been answered, your end result will be incorrect.  

@hahari

[dmertz]

It's a bit difficult to figure out exactly what happened since you provided rounded numbers in your original question, but removing the entry for your own personal contribution largely or completely removed the excess contribution.  When you removed your wife's personal contribution that she did not make, that removed the corresponding deduction, increasing AGI and taxable income.  It's likely that the increase in AGI also caused a side effect, perhaps something like a reduction in earned income credit or a reduction in a Retirement Savings Contributions Credit.  Compare your Form 1040 and Schedules 1 through 3 with and without the change to your wife's personal contribution to see what side-effects might be at play.

The large increase in tax liability when removing your wife's personal-contribution entry seems to suggest that you might benefit greatly from increasing your HSA contribution to the maximum $7,000 combined by actually making personal contributions to one or both HSAs by the July 15, 2020 contribution deadline.