How to Reverse Too Much HSA Contribution 2018

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Correcting excess HSA contributions in 2018

If you have made excess contributions to your HSA in 2018, there are steps you can take to reverse the mistake. The IRS sets limits on how much you can contribute to your HSA each year, and exceeding these limits can result in penalties. Here's how you can correct your excess HSA contributions for 2018:

1. Know the Contribution Limits: For 2018, the maximum HSA contribution for an individual was $3,450 and $6,900 for a family. Make sure you are aware of these limits to avoid over-contributing.

2. Assess the Excess Contributions: Calculate how much you have contributed over the allowable limit for 2018. Any excess amount will need to be removed from your HSA.

3. Contact Your HSA Administrator: Reach out to your HSA provider to inform them of the excess contributions and request a corrective distribution.

4. Corrective Distribution: Your HSA administrator will process a corrective distribution to remove the excess contributions plus any earnings from the over-contributions, which will be reported on your tax return.

5. File Form 8889: You will need to include Form 8889 with your tax return to report the corrective distribution and any associated tax implications.

By following these steps, you can reverse the excess HSA contributions you made in 2018 and avoid penalties from the IRS.

If you find yourself in the unfortunate situation of having contributed too much to your HSA in 2018, don't panic. The key is to take prompt action to mitigate any penalties that might arise. Understanding the IRS’s contribution limits is the first step.