In 2019, the contribution limits are $3,500 for Self-Only plans and $7,000 for Family. $1,000 catch-up contributions were allowed for taxpayers over age 55.
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
If it turns out you did have an excess contribution, the following applies. Generally, you must pay a 6% excise tax on excess contributions. See Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. The excise tax applies to each tax year the excess contribution remains in the account.
You may withdraw some or all of the excess contributions and avoid paying the excise tax on the amount withdrawn if you meet the following conditions.
- You withdraw the excess contributions by the due date, including extensions, of your tax return for the year the contributions were made.
- You withdraw any income earned on the withdrawn contributions and include the earnings in "Other income" on your tax return for the year you withdraw the contributions and earnings.
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The HSA is handled in 3 parts in the TT program :
First the contribution:
Next the limitations screen to confirm you are eligible to make the contributions:
Until you complete the HSA portion of the TurboTax interview to establish your eligibility for an HSA contribution, TurboTax will treat the amount entered on the W-2 form as an excess HSA contribution.
And lastly any distribution: