How do I roll forward excess HSA contribution

[msindc1]

Folks:

When taxpayers make excess HSA contributions, they can roll them forward to the next tax year.  But how is that done in Lacerte?

Micah

[dkh]

Are you looking for where to a) enter excess from 2022  or b) how to rollover 2023 to 2024 ?

a)  Enter on Carryover Worksheet - Excess Contributions

b)  doesn't  F8889 automatically calculate the excess and carryover if you don't enter a withdrawal of excess amount 

[msindc1]

😧

Client overpaid HSA in 2023 (he changed jobs and both employers made contributions).

I don't believe that 8889 calculates the excess or the carryover.

M.

[qbteachmt]

Why not remove it before the tax filing? Then there is no penalty; only taxable income.

And does the employer know not to overpay this year, if they leave it ride, or will that become a cycle of overpayments? Sometimes it's easiest to clean up a mess.

[msindc1]

Yes, I agree that that is the better choice.  But it is not my choice to make, it is the client's, which puts me in the position of asking the question I have asked!

[dkh]

There is a section on the Carryover worksheet for HSA excess contributions and it is a program calculated amount which is coming from the F8889 .... I tested it.     

Have you looked at the clients Carryover Worksheet to see if there is an amount  ?

[msindc1]

I know that this was last year's problem . . . but it is this year's problem as well!  Ack.

I still cannot figure out how to tell Lacerte that I am rolling the excess contributions to next year!

I can put an entry in the "Distributions entered above rolled over to another HSA" in screen 321, but that does not seem to amount to a carryover and no carryover shows in the list of carryovers.

Help!

M.

[qbteachmt]

Excess is not the same as distribution, and you stated the taxpayer isn't taking the excess out, anyway, so no distribution. Although, they can change their mind and do so up to 6 months after the due date of the return.

If this also was invested, there are reportable taxable (and excise tax) for the earnings attributable to that excess, even though the excess won't be deducted for 2024.

Look at the penalty form 5329.