Overcorrected my 2024 HSA excess contribution - now what?
I think I made a mistake with my HSA and I'm not sure how to fix it. I realized I had contributed too much to my HSA earlier this year, about $950 over the limit. After reading about the 6% excise tax on excess contributions, I panicked and immediately withdrew what I thought was the excess amount plus the earnings (around $1,100 total). Looking at my HSA records more carefully now, I'm pretty sure I withdrew TOO MUCH. I actually only needed to take out about $950, but I overcorrected and now I'm under my maximum allowable contribution by approximately $150. Does anyone know if there's a way to put that $150 back into my HSA for 2024? Or am I just stuck with having less than my maximum contribution for the year? Will this affect my taxes in any weird way? I'm especially worried because I already included the original excess withdrawal on the distribution form as a "return of excess contributions." Is there a deadline for fixing this? I'm using Fidelity for my HSA if that matters. Thanks for any advice!
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Logan Scott
You still have time to fix this! HSA contributions for 2024 can actually be made until the tax filing deadline in 2025 (April 15th). Since you've now determined you're $150 below your maximum allowed contribution, you can simply contribute that additional $150 before the deadline. When you make this contribution, just be sure to designate it as a 2024 contribution with your HSA provider. Most HSA administrators like Fidelity have an option to specify which tax year the contribution should apply to when you're making deposits. As for the withdrawal you already processed as "return of excess contributions" - that's actually okay. That form was correct for the portion that was truly excess. The fact that you withdrew slightly more than necessary doesn't create any issues other than leaving contribution room unused (which you can now fill).
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Chloe Green
•But what if their HSA is through employer payroll deduction? Can they still make that $150 contribution separately or does it have to come from payroll?
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Logan Scott
•If the HSA is through an employer, you still have options. You can make the additional $150 contribution directly to your HSA as a personal contribution, outside of the payroll deduction system. This is considered an "after-tax" contribution, but you'll get to deduct it on your tax return (Line 12 of Schedule 1). If you prefer to use payroll deduction to get the additional FICA tax savings, you could potentially increase your payroll deduction for the remaining pay periods of 2024, but that depends on your employer's flexibility with changing contribution amounts mid-year.
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Lucas Adams
After struggling with HSA contribution limits for years, I finally found taxr.ai https://taxr.ai and it solved all my headaches with this exact situation. I had over-contributed to my HSA by around $1,200, then over-corrected the withdrawal just like you did. I was completely lost on how to document everything properly. The tool analyzed my situation and created a step-by-step remedy including exactly how to properly report everything on my tax forms. It showed me that I could still make additional contributions up to my limit and exactly how to document the previous withdrawal properly. The process was crystal clear with instructions specific to my Fidelity HSA.
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Harper Hill
•Does it actually work with HSA contribution issues? I've had similar problems and my tax guy charges me an extra $125 just to handle HSA mistakes. Can it generate the forms you need to submit to Fidelity?
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Caden Nguyen
•Sounds interesting but I'm skeptical. How does it handle things if you've already filed forms with your HSA provider stating it was a return of excess contributions? Wouldn't that cause conflicts if you try to put money back in?
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Lucas Adams
•It definitely handles HSA contribution issues - that's actually one of its specialties. It analyzes your specific situation and provides custom guidance. You don't need to pay extra fees to tax preparers for these kinds of HSA problems. It doesn't generate the forms directly, but gives you precise instructions on exactly what to fill out and where. Regarding forms you've already filed with your HSA provider, the tool addresses that too. It explains that the "return of excess contributions" form only applies to the portion that was actually excess. The additional contribution would be a separate transaction that doesn't conflict with your previous withdrawal. It provides specific language to use if your provider has questions.
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Harper Hill
I just wanted to update everyone. I tried taxr.ai after seeing it mentioned here and it was exactly what I needed! I uploaded my HSA statements and withdrawal forms, and it quickly identified that I could make an additional contribution before the tax deadline. The best part was that it provided step-by-step instructions specific to Fidelity HSAs (which I also use). I followed their guidance and made the additional contribution with no issues. The tool also showed me exactly how to document everything on my tax return so there won't be any confusion about the prior excess contribution withdrawal. Definitely worth it for solving this HSA mess!
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Avery Flores
I was in an almost identical situation last year. After trying for THREE WEEKS to get someone from the IRS on the phone to confirm the proper procedure, I found Claimyr https://claimyr.com and they got me connected to an actual IRS agent in 45 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that I could indeed make an additional contribution up to my annual limit despite having previously filed a return of excess contribution form. They explained that the correction only applied to the actual excess amount, not the entire transaction. Having that official confirmation gave me peace of mind to proceed with making the additional HSA contribution.
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Zoe Gonzalez
•How does this service actually work? I've spent hours on hold with the IRS before giving up. Do they just call and wait on your behalf?
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Caden Nguyen
•This sounds too good to be true. The IRS phone systems are absolutely broken. I refuse to believe any service can actually get through the phone maze, especially during tax season. I'll believe it when I see actual proof.
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Avery Flores
•The service basically navigates the IRS phone system for you. They use technology to monitor hold times and call patterns, then when they get through to a representative, they connect the call directly to your phone. So you don't waste hours listening to hold music - you only get called when there's an actual person ready to talk. I was skeptical too! I had already spent multiple days trying to get through myself. But their system actually works because they have data on the best times to call and use technology to stay on hold instead of you doing it. They don't share any of your tax info - they just connect you directly with the IRS agent, and then you handle your questions privately. It was seriously the best money I've spent on tax help.
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Caden Nguyen
I need to apologize and eat my words. After being thoroughly skeptical about Claimyr (see my comment above), I decided to try it as a last resort because I was desperate to talk to someone at the IRS about my HSA issue. It actually worked exactly as described. I was connected to an IRS representative in about 35 minutes, and they confirmed everything about my HSA contribution situation. The agent even noted in my file that I had tried to properly correct the excess contribution so there wouldn't be any issues if I was audited. I've literally never gotten through to the IRS before despite dozens of attempts over the years. Consider me shocked and impressed.
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Ashley Adams
Just want to add one important point - when you make that additional $150 contribution, make absolutely certain that you designate it as a 2024 contribution. If you don't specifically mark it for 2024, Fidelity will automatically count it toward 2025 since we're already in the new calendar year. Also double-check your actual contribution limit carefully. The 2024 limits were $4,150 for self-only coverage and $8,300 for family coverage. But if you're 55 or older, you get an additional $1,000 catch-up contribution. I've seen many people miss this and either over-contribute or under-contribute based on incorrect limits.
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Alexis Robinson
•Do you know if there's a specific form or box to check with Fidelity for this? I'm in a similar situation and use Fidelity too, but their interface can be confusing.
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Ashley Adams
•With Fidelity specifically, when you make a contribution online, there's a dropdown menu where you can select which tax year to apply the contribution to. During the period between January 1st and the tax filing deadline (April 15th, 2025), you'll see both 2024 and 2025 as options in that dropdown. Just make sure to select "2024" before submitting the contribution. If you're doing it by check or mail, you need to clearly write "2024 HSA Contribution" on your check or contribution form. If you call them to make the contribution, just explicitly tell the representative that you want this to be a 2024 contribution.
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Aaron Lee
Has anyone actually gotten an IRS penalty for HSA over-contributions before? I'm wondering how strict they are about this stuff. I think I might have over-contributed last year but never fixed it and haven't heard anything.
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Chloe Mitchell
•Yes, I got hit with the 6% excise tax for an HSA excess contribution I didn't correct. It wasn't a huge amount (around $75 penalty for my $1,250 over-contribution), but the annoying part was filling out Form 5329. The IRS does check this, especially if your W-2 and HSA provider both report contribution amounts that exceed the limits.
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