Enter Last Year's Excess Contribution

[ragavi98]

Hi I'm filling out my 2022 Tax Return. It asks to enter last year's excess contribution. I'm assuming by last year it's referring to 2021. I'm not sure if I have form 5329 from 2021, but the amount that should be put in is line 48 on that form.

1. I have a pdf of my 2021 tax return from turbo tax. Is there any box I can look at on my 2021 tax return to see if I overfunded my HSA in 2021? Also I started my first full time job in the summer of 2021.

2. I did have excess contributions for X amount in the section employer and payroll contributions made in 2022 for the tax year 2021 which I inputted. Is that the same as last year's excess contribution? I would assume not?

[BillM223]

To make something clear, in the HSA interview, when TurboTax asks if you "overfunded" your HSA last year (which, yes, means 2021) what it is actually asking is "did you carry over any excess HSA contributions to 2022?" NOTE: if you returned the excess for 2021 before the due date for 2021 (April 15, 2022), then you cured the excess, so you did not "overfund your HSA in 2021).

If you did not have a form 5329 in your 2021 return, then (presumably) you did not carry over any excess from 2021 to 2022 (because you would have been penalized for this on form 5329). You can confirm this by looking at Schedule 2 (1040) at line 8. If it is blank, then there was no 5329. (Unfortunately, the reverse is not true since there are many reasons why there may be numbers on line 8 of Schedule).

I am not sure what #2 is referring to. Did you get into the part of the interview where the heading on a screen said that you had  lapse in your coverage, and then asked for your HSA contributions in 2021?

[ragavi98]

Thank you! I do have an amount on the 2021 Schedule 1(Form 1040) line 8. It's the X amount in the section "employer and payroll contributions made in 2022 for the tax year 2021". There's no schedule 2 form I see on the 2021 tax return.  I only see 2021 Schedule 1(Form 1040).

1. Did you mean to say Schedule 1? 
2. Can you please clarify what you mean by especially when you're referring to reverse "Unfortunately, the reverse is not true since there are many reasons why there may be numbers on line 8 of Schedule"?

There's a section that states "Let's enter you HSA contributions". After clicking continue the next page is "Did your employer tell you about any other contributions? Underneath it I clicked yes and then 3 additional prompts popped up: Employer and payroll contributions made in 2022 for the year 2021(This is where I filled out X amount which matches what's on line 8), Employer and payroll contributions made in 2023 for the year 2022, and Employer and payroll contributions not reported in Box-12 of your W-2.

[BillM223]

"1. Did you mean to say Schedule 1? " - No, I meant to say Schedule 2. The fact that you did not have a Schedule 2 means that you, without a doubt, did not have a 5329, because any penalty calculated on the 5329 would have flowed to line 8 on Schedule 2. But if there were no numbers for Schedule 2, then the Schedule is not attached to your return (the same is true for schedules 1 and 3).

"2. Can you please clarify what you mean by especially when you're referring to reverse "Unfortunately, the reverse is not true since there are many reasons why there may be numbers on line 8 of Schedule"?" The previous paragraph explains it. The 5329 (look for yourself) has nine parts, each of which calculates a different penalty. If there is no entry on line 8 of Schedule 2, then there is no entry in any part of the 5329. But if there is an entry on line 8 of Schedule 2, all you know is that one or more of the parts on the 5329 showed a penalty, but you don't know which part. So an entry on line 8 of Schedule 2 may or may not show that you carried over excess HSA contributions.

"There's a section that states "Let's enter you HSA contributions". After clicking continue the next page is "Did your employer tell you about any other contributions? Underneath it I clicked yes and then 3 additional prompts popped up: Employer and payroll contributions made in 2022 for the year 2021(This is where I filled out X amount which matches what's on line 8), Employer and payroll contributions made in 2023 for the year 2022, and Employer and payroll contributions not reported in Box-12 of your W-2."

Please UNDO what you did here - You were mixing crabs and apples to get crabapples. Line 8 of Schedule 2 is the penalty for one of several conditions on form 5329 (or did you mean a different line 8?), while "Employer and payroll contributions made in 2022 for the year 2021" is just that - HSA contributions.

***

Your post started out with: "It asks to enter last year's excess contribution." I have seen nothing that suggests that you had excess contributions last year (yes, this means for 2021). So just stop and move on from this question and finish the HSA interview.

[ragavi98]

1. Please UNDO what you did here - You were mixing crabs and apples to get crabapples. Line 8 of Schedule 2 is the penalty for one of several conditions on form 5329 (or did you mean a different line 8?), while "Employer and payroll contributions made in 2022 for the year 2021" is just that - HSA contributions.

Sorry my bad that was confusing on my part. I was referring to a different line 8. I was referring to line 8 on form 1040 and line 8e on schedule 1(form 1040). They're both the same amount. It's the 2022 contributions made for the year 2021. I called the hsa account partnered with my company and they said there was X amount for Employer and payroll contributions made in 2022 for the year 2021 which I entered. Please correct me if I'm wrong on entering this X amount here. 

2.Your post started out with: "It asks to enter last year's excess contribution." I have seen nothing that suggests that you had excess contributions last year (yes, this means for 2021). So just stop and move on from this question and finish the HSA interview.

Ok thank you.