How do health care reform and taxes connect? The Affordable Care Act is single largest change to the tax code in two decades. Find help navigating the complexities of the new health care legislation, Medicare, Medicaid and other medical deductions.
02-28-2018 08:00 PM
Hi all, new guy here.
So I under contributed to my HSA in 2016 by $550 and over contributed in 2017 by $1500. In addition to that mess, a provider overcharged me $950 and refunded the amount by check, From the viewpoint of wanting to keep as much money in the account as possible, I'm thinking reallocate $550 from 2017 to 2016 and then withdraw the remaining excess prior to filing. Is there a better option? What are the tax and penalty ramifications?
My HSA bank is telling me I have to complete three separate transactions:
Does that sound right?
Thanks for you help.
Solved! Go to Solution.
03-01-2018 10:15 AM
I am surprised your bank is willing to address your 2016 shortfall since it is well beyond the cutoff date to make this contribution. I assume that all contributions were made pretax through your employer. The bank will have to issue you a corrected 2016 Form 5498-SA showing the added contribution of $550. Is order to receive a deduction for the contribution is 2016, you would amend your taxes and enter $550 as an after tax contribution. This would necessitate showing this $550 as income on your 2017 taxes to avoid a double tax break. You also show the $950 excess contribution as income on your 2017 taxes. The total is $1500 additional income for 2017. Your 2017 Form 5498-SA should reflect the $1500 total adjustment in 2017 contribution.