What to Do If You Put Too Much in Your HSA Account?

If you find yourself in a situation where you have contributed more than the allowable limit to your HSA (Health Savings Account), don't worry, there are steps you can take to address this issue.

First and foremost, it's important to be aware of the contribution limits for an HSA. For 2021, the maximum annual contribution for an individual is $3,600, and for a family, it is $7,200. If you have exceeded these limits, here's what you can do:

1. Withdraw the Excess Contributions: You can withdraw the excess contributions and any earnings made from them before the tax filing deadline for the year without facing any penalties or taxes.
2. Pay the Excise Tax: If you do not withdraw the excess contributions in time, you may be subject to a 6% excise tax on the excess amount.
3. Contact Your HSA Provider: It's a good idea to reach out to your HSA provider to inform them of the excess contributions and seek their guidance on the next steps to rectify the situation.
4. Adjust Future Contributions: To prevent this from happening in the future, make sure to adjust your HSA contributions to stay within the allowable limits.

Remember, staying informed about HSA contribution limits and taking proactive steps can help you navigate any inadvertent mistakes effectively. If you ever find yourself in this situation, follow the steps above to address it promptly.

Finding out that you've over-contributed to your HSA can be daunting, but taking action can help alleviate any stress. Remember that staying informed about HSA contribution limits is key to financial health.