Hi all,
I over contributed $1250 to my HSA in year 2022, I realized that and corrected it by withdrawing this amount on 04/19/2023 (one day right after tax deadline of 04/18/2022, prior that I had already requested the tax extension to 10/16/2023). All my HSA fund were kept in a savings/cash account (no investments).
Can someone help me understand:
(1). After I extended the deadline to 10/16/2023 and withdraw the extra amount, am I still facing any penalty for over contribution?
(2). I already filed to IRS of that extra $1250 as my other income for tax year 2022, what to do with the form 1099-SA I received afterwards, should I just skip or fill in all the information into Turbotax to pay tax possibly twice?
No, once you extended your return, you had until October 15 to withdraw the excess, although you might have to fight the HSA custodian a bit about the withdrawal being after April 15th.
"I already filed to IRS of that extra $1250 as my other income for tax year 2022" - Are you saying that you manually adjusted your 2022 return to add back that $1,250? The moment that the excess was discovered by TurboTax, TurboTax added the excess back to Other Income, assuming that the excess was from the code W amount in box 12 of your W-2.
"what to do with the form 1099-SA I received afterwards, should I just skip or fill in all the information into Turbotax to pay tax possibly twice?" - Does this 1099-SA have a code of 2 in box 3? If so, only the earnings in box 2 are added to your income; the amount of excess in box 1 is ignored, because TurboTax knows that the excess was already handled.
Does this cover your situation?
No, once you extended your return, you had until October 15 to withdraw the excess, although you might have to fight the HSA custodian a bit about the withdrawal being after April 15th.
"I already filed to IRS of that extra $1250 as my other income for tax year 2022" - Are you saying that you manually adjusted your 2022 return to add back that $1,250? The moment that the excess was discovered by TurboTax, TurboTax added the excess back to Other Income, assuming that the excess was from the code W amount in box 12 of your W-2.
"what to do with the form 1099-SA I received afterwards, should I just skip or fill in all the information into Turbotax to pay tax possibly twice?" - Does this 1099-SA have a code of 2 in box 3? If so, only the earnings in box 2 are added to your income; the amount of excess in box 1 is ignored, because TurboTax knows that the excess was already handled.
Does this cover your situation?
Thanks Bill,
Yes, TurboTax added the $1,250 excess back to Other Income, and you are right, the excess was from the code W amount in box 12 of one of my W-2
Also, you are right, my 1099-SA have a code of 2 in box 3.
Thanks for your answer, that solved my question.