Thanks for this! Definitely individual coverage in my case. So basically I just need to override TurboTax and report the full $200.08 as an excess contribution withdrawal, right? Did you have any issues with the IRS after filing that way?

Yes, exactly - override TurboTax and report the full $200.08 as an excess contribution withdrawal on line 13 of Form 8889. I had zero issues with the IRS after filing that way. The key is that you've already withdrawn the excess amount, which is the most important step. The reporting just needs to match what actually happened. The IRS receives Form 5498-SA directly from your HSA custodian, so they'll already know the actual contribution amount. Your tax return just needs to match that reality. I was worried too, but everything processed normally and I received my refund without any questions.

Did you need to file any extra forms with the HSA provider after withdrawing the excess? My HSA bank is telling me I need to specifically request a "return of excess contributions" rather than just a regular withdrawal.

Thank you for bringing this up! I actually do have student loans, so that's really helpful to know. Do you know roughly what income level the student loan interest deduction starts to phase out? And would HSA contributions have the same effect of lowering my AGI?

The student loan interest deduction starts phasing out at $75,000 for single filers and $155,000 for married filing jointly in 2024. Since you mentioned making $72,000, you're right at the edge where increasing retirement contributions could make a big difference. And yes, HSA contributions absolutely lower your AGI in the same way 401k contributions do! Both HSA and traditional 401k contributions are pre-tax and reduce your adjusted gross income. This can help you qualify for credits and deductions that have income limitations. In your case, both strategies would work together to potentially keep you fully eligible for the student loan interest deduction.

Generally: HSA first if you have matching funds for it (rare), then 401k up to employer match, then max HSA, then back to 401k. HSA has better tax advantages than 401k since withdrawals for medical expenses are tax-free (401k withdrawals are always taxed as income).

Did your sister mention anything about whether this affects how quickly we'll get our refunds once Feb 15th hits? Like if we're already in the system, do we get processed faster?

My sister says early filers definitely get processed faster once the Feb 15th date passes. The IRS essentially creates a queue of all the PATH Act returns (ones with EIC/CTC), and they process them in roughly the order received once that date hits. So being already in the system and "accepted" means you're at the front of that line. She also mentioned that most people with straightforward returns who file electronically and choose direct deposit usually see their refunds within 7-10 days after Feb 15th if they filed in January. So you could potentially see your money by Feb 22-25th.

That's totally normal this time of year. Mine was accepted on 1/15 and shows the same thing. It won't update to "Refund Approved" until after they can actually process the EIC/CTC returns after Feb 15th. It's frustrating, but at least we know they have it!

Can you deduct a home office if you're only doing this 1099 work part time? I use my spare bedroom for my freelance design work but it's not my main job.

Yes, you can still claim a home office deduction for part-time self-employment work. The key requirement is that the space must be used "regularly and exclusively" for your business activities. If your spare bedroom is used solely for your freelance design work and not for other purposes, you can deduct it. You have two options: the simplified method (currently $5 per square foot up to 300 sq ft) or the regular method where you calculate the actual expenses based on the percentage of your home used for business.

Would that be better than just using a Roth IRA? I thought those had better long-term tax benefits.

That's an interesting angle I hadn't considered. This is my first time doing seller financing, but I do have two other rental properties that I might sell in the next few years. Would doing just 2-3 of these transactions be enough to qualify as a business? Or would I need to do this more regularly?

Just 2-3 transactions over several years would probably not be enough to qualify as being in the lending business. The IRS would likely view that as investment activity rather than a business. To be considered a business, you'd typically need to show more regular activity and perhaps even advertise your services or create a formal business structure. Most people who do occasional seller financing end up treating it as investment activity and reporting it on Schedule B with the associated expenses offsetting the interest income. If you were doing multiple loans per year and actively seeking out opportunities to provide seller financing, that might cross the threshold into business territory.

I've done seller financing for several properties and found that H&R Block's premium version handled it better than TurboTax. It specifically asked about loan origination costs and gave clear guidance on amortizing them over the loan term. It also had a specific section for investment expenses related to interest income.