In 2021 turbotax asked how much I contributed to my HSA. Since I contributed the full amount allowed I entered $4550 which I should not have entered because I paid through my employer (not on my own). What I didn't understand was that turbotax looked at my W2 and found that my employer had contributed $4768 that year. So it added the two numbers and instead of having an overpayment of $218, my taxes said that I overpaid by $4768. How do I fix my 2021 taxes to correctly show that I only overpaid by $218 since it will penalize me every year?
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*****************if you successfully submitted the 2021 return then you'll have to amend it by removing the amount you say you contributed. you had until 4/15/2022 to remove the real excess without penalty. you also had to remove any income earned on that excess and pay taxes on it. now the only way to avoid continual year-after-year penalties on that is to under-contribute the maximum by that excess. you then get a deduction for the excess to bring you up to the max for that year.
***************Because the penalty is based on the amount of excess or the amount of value of the account, whichever is smaller, it would also be possible to eliminate the excess, if you spent the account down to zero. However, if you don’t have a large medical expense, then the withdrawal would be subject to a 20% penalty, on top of the penalties you have already paid, so I don’t think this is the way to go.
@Mike9241 When I amend my 2021 taxes, that will correct my over payment to $218+interest and that is what I will have to underpay next year to eliminate the penalty, right?
I can't find anything I did wrong with my or my employer's input to be able to amend my tax return. It appears that there was a bug in the Turbotax program. Where should I go to get that figured out.
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