Author Topic: Ready to fill hsa  (Read 2209 times)

mozar

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Ready to fill hsa
« on: October 20, 2016, 12:39:05 PM »
I have had an hsa since February 1, so that means I can put 11 months down on my taxes. But I was talking to my hsa agent he was saying I could put in the full 3350 as long as I have the hsa for all of 2017. Is that true? And how would that look on my taxes?

Mother Fussbudget

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Re: Ready to fill hsa
« Reply #1 on: October 20, 2016, 12:43:25 PM »
Exactly true.

Heroes821

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Re: Ready to fill hsa
« Reply #2 on: October 20, 2016, 01:17:39 PM »
And if you have an HSA qualified plan in Jan 2017 you can fully fund it at the beginning of the year so you can collect the interest and gains all year long on the full amount.  The only issue with this is when your employer contributes as well, they only like to do that per pay.

Spork

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Re: Ready to fill hsa
« Reply #3 on: October 20, 2016, 01:41:19 PM »
Absolutely.  We fund our HSA in full at the first of the year.  The same was true of Roth's back when we qualified for them.

Dezrah

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Re: Ready to fill hsa
« Reply #4 on: October 20, 2016, 02:28:09 PM »
Your agent is correct.  It's sometimes referred to as the full-contribution rule or the 13-month rule.  As long as you remain covered by only an HDHP from Dec 1, 2016-Dec 31, 2017, you can make the full 2016 HSA contributions.

http://www.shdr.com/shdr/assets/shdr/pdf/resources/articles/hsa-contribution-rules-article.pdf

You will always report on your return how much you contributed to your HSA that year.  There is nothing special you need to do to prove you followed this rule.  If you are audited, you may have to produce proof of coverage but that is all.

If your circumstances change and you can't meet the 13-month requirement, you just pull out the excess funds (in your case 1/12th of the full amount) and submitted amended tax returns.  There shouldn't be a penalty however unless you ignore it.


MDM

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Re: Ready to fill hsa
« Reply #5 on: October 20, 2016, 02:32:28 PM »
1) Is that true?
2) And how would that look on my taxes?
1) Yes.  See 2015 Publication 969
Quote
Last-month rule.
Under the last-month rule, if you are an eligible individual on the first day of the last month of your
tax year (December 1 for most taxpayers), you are considered  an  eligible  individual  for  the  entire  year.  You  are
treated as having the same HDHP coverage for the entire year as you had on the first day of the last month.
Testing  period.
If  contributions  were  made  to  your HSA based on you being an eligible individual for the en-
tire year under the last-month rule, you must remain an eligible  individual  during  the  testing  period.  For  the
last-month  rule,  the  testing  period  begins  with  the  last month of your tax year and ends on the last day of the
12th month following that month. For example, December 1, 2015, through December 31, 2016.

2) See 2015 Form 8889 and line 25 of 2015 Form 1040.

mozar

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Re: Ready to fill hsa
« Reply #6 on: October 20, 2016, 07:18:16 PM »
So I can put the 3350 in this year, but it says on line 3 of form 8889 "3 If you were under age 55 at the end of 2015, and on the first day of every month during 2015,you were, or were considered, an eligible individual with the same coverage, enter $3,350"?

What does this mean?
There's no employer match. And thanks for responses so far.

MDM

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Re: Ready to fill hsa
« Reply #7 on: October 20, 2016, 07:23:04 PM »
So I can put the 3350 in this year, but it says on line 3 of form 8889 "3 If you were under age 55 at the end of 2015, and on the first day of every month during 2015,you were, or were considered, an eligible individual with the same coverage, enter $3,350"?
What does this mean?

When all else fails, read the instructions. ;)