Author Topic: HSA Excess Contribution Tax Question  (Read 188 times)

Cadman

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HSA Excess Contribution Tax Question
« on: February 17, 2019, 12:18:26 PM »
Hey guys,
I just realized we over contributed to our HSA in 2018 by roughly $600 (incld earnings). I've already filled out the paperwork to have the excess contributions (and earnings) removed. The trouble is when it comes to the federal forms. We have NOT filed our taxes yet.

Do I need to file form 5329? When completing the appropriate section (Part VII) it ends with calculating the 6% additional tax on the excess which I don't think is correct as it's being removed before the filing deadline.

When I work through Part II of form 8889, box 16 (taxable HSA distributions) ends up as zero. Perhaps I'm misinterpreting the instructions...my 14a is $600 (no other distributions other than the excess), my 14b is $600 (excess contribution portion included on 14a), so net (14c) is zero. There were no qualified medical expenses paid in 2018, so line 15 is also zero. So when I calculate line 16, I end up zero from zero = zero.

What am I missing?


Cadman

  • Bristles
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  • Posts: 318
  • Location: Midwest
Re: HSA Excess Contribution Tax Question
« Reply #1 on: February 19, 2019, 12:25:38 PM »
For those that do find this thread in the future, I was able to turn up a bogleheads post from an individual with the same dilemma. The consensus is that 5329 doesn't require completing as the excess is being removed before filing.

The 8889 still needs to be filled out with the excess contribution, even if removed. And the excess plus earnings must be reported as 'other income' on the 1040 with your own remark showing that, despite no actual line item on the form instructing as such.