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How can HSA contributions impact my taxes?

You must be covered by a high-deductible health plan and generally can’t have other coverage (except as described under other health coverage in IRS Publication 969) in order to make contributions to an HSA.

The maximum amount you can contribute to your health savings account (HSA) each year depends on multiple factors, including:

Go to this section in Credit Karma Tax: Health Savings Account (HSA)

For 2018, contribution limits are $3,450 for self-only HDHP coverage, and a maximum of $6,900 for family HDHP coverage. If you’re an eligible individual who is 55 or older by the end of the tax year, you may qualify to contribute an additional $1,000.
Source: healthcare.gov

You may want to consider reviewing the HSA section of Credit Karma Tax even if you don’t recall making any contributions to your HSA during the tax year. Your employer might have contributed to an HSA directly from your W-2 (box 12, code W), completing the HSA section of Credit Karma Tax will allow the software to determine which of your contributions (if any) can be excluded from your income and if you have excess contributions.

If you distributed funds from a retirement account to your HSA, these amounts count towards your overall HSA contribution limit for the year. If you did this you may receive a form 1099-R showing the distribution from your retirement account.

Transferred funds from a retirement account and amounts contributed out of pocket count towards your HSA contributions. If you go over the contribution limit they may be deemed excess contributions.

What if I received money from my HSA?

If you received a distribution from the HSA account or if you’ve received a Form 1099-SA, you should complete the HSA Distributions section in Credit Karma Tax.
Source: irs.gov

Go to this section in Credit Karma Tax: HSA Distributions

Learn more about What qualified medical expenses can I use for HSA?

What happens if I have excess HSA contributions?

Excess contributions made to your HSA above the IRS limits for the tax year aren’t tax deductible, may be taxable, and you may also incur a penalty on the excess depending on your individual situation.
Source: irs.gov

Enter your HSA information into the Health Savings Account (HSA) section, and we’ll determine if any of your HSA contributions are taxable based on the information you provide.

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