Author Topic: HSA contributions based on last month of the year  (Read 1051 times)

FiguringItOut

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HSA contributions based on last month of the year
« on: February 01, 2018, 12:03:56 PM »
I had several changes in health insurance coverage during 2017.
Based on what month which members of the family were covered by HDHP, I figured that my max contribution for the year is $5,070.
However, I can contributed the full family contribution of $6,750 based on the last month of 2017, provided I keep family HDHP for the whole 2018.
This is a difference of additional $1,680 I can contribute to HSA for 2017.
If I don't stay eligible for the whole 2018, then the excess amount contributed for 2017 will be taxed and penalized at 10%.
My effective tax rate for 2017 is about 6-8%, I haven't finished my taxes yet.
My job doesn't have cafeteria plan, so I am still paying FICA on my HSA contributions.

The thing is, I am currently looking for a new job.  It's not going great, very few positions available, and they are hard to get.  So I may find something in the next month or two, or stay where I am through the end of year.
If I move to a new job, it is not guaranteed that they will have HDHP available. Some positions I applied for but did get stated that they had 100% employer paid health insurance, whatever that means. 

So, what would you do?  Contribute based on the last month of the year, or stay with the actual amount of contributions that I am 100% eligible to make.


 


FiguringItOut

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Re: HSA contributions based on last month of the year
« Reply #1 on: February 02, 2018, 07:31:45 AM »
Nobody?

SaucyAussie

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Re: HSA contributions based on last month of the year
« Reply #2 on: February 02, 2018, 07:43:29 AM »
I would not make the extra contribution, seems like it would taking be an unnecessary risk for paying a penalty without much upside. 

Do you have something else useful you could do with that $1680?  Pay off debt, Roth IRA?  Or being unemployed, would boosting your EF be a good idea?

FiguringItOut

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Re: HSA contributions based on last month of the year
« Reply #3 on: February 02, 2018, 07:51:47 AM »
I would not make the extra contribution, seems like it would taking be an unnecessary risk for paying a penalty without much upside. 

Do you have something else useful you could do with that $1680?  Pay off debt, Roth IRA?  Or being unemployed, would boosting your EF be a good idea?

IRA is maxed out already for 2017.  I suppose I can start on 2018.  Or add it to the emergency fund.  Or start on 2018 HSA.  Just that I am trying to stuff pretax accounts as much as possible.  It was just a thought