HSA Excess Contribution
In 2020 we contributed too much to our HSA. In addition, our tax preparer did not include the HSA deduction on our 2020 return. We also had an excess contribution in 2021, we are in the process of withdrawing that money now and will file our taxes after that transaction has been completed, so there will be no tax penalities.
I’m requesting advice on the best way to handle the 2020 HSA mess.
Can the oversight of not claiming our HSA contribution and handling the excess contribution amount & earnings (and taking care of the resulting penalties) be handled in one amended 2020 return? (Then our 2021 return would only deal with the 2021 excess contribution.)
Or…. should I withdraw the 2020 excess amount ASAP and also deal with that on the 2021 return? (I’m assuming that the IRS knows we contributed too much even though we didn’t claim the contribution on our 2020 taxes.) I’m also assuming that the 2020 return could then be amended afterwards to deduct the corrected contribution amount.
Terry Says
This is way too complicated for me!
First, read this article: https://www.benstrat.com/hsa-faq-excess-contributions/#:~:text=To%20remove%20excess%20contributions%2C%20complete,HSA%20Distribution%20Request%20form%20instead.
Then get a new accountant!!!