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If you start with a new HDHP on Jan. 1, 2014, can you contribute the entire amount ($6550) for the whole year to the HSA on January as well? The idea is to front load the contribution to give it more time to compound.
If you start with a new HDHP on Jan. 1, 2014, can you contribute the entire amount ($6550) for the whole year to the HSA on January as well? The idea is to front load the contribution to give it more time to compound.
Yes, you can put the funds in any time during the year. Just be aware that you have to stay on the plan through at least Dec 1, 2014 .
I was told by my HR people that HSA contributions could be prorated. In other words, if OP leaves the plan in September, 75% of his contributions would be deductible. He would need to withdraw the other 25% (and earnings attached thereto).
I was told by my HR people that HSA contributions could be prorated. In other words, if OP leaves the plan in September, 75% of his contributions would be deductible. He would need to withdraw the other 25% (and earnings attached thereto).
Well, then, I'm in trouble with the IRS, because that's what I was told.
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You own your account, so you keep your HSA, even if you change health plans or leave Federal Government.
However, if your HSA was fully funded and you leave the HDHP during the year, then you will have to withdraw some of the contribution from the account.
You must pay income tax on your excess contributions and income tax on any earnings of the excess contribution. There is no 20% penalty on excess contributions.
If you no longer are enrolled in an HDHP you are not eligible to make contributions to your HSA, but you may request withdrawals for qualified medical expenses.
Yes, you can put the funds in any time during the year. Just be aware that you have to stay on the plan through at least Dec 1, 2014 .
Do I interpret you to mean I can put the entire lump sum of $6550 at the start of the year? Do you have a reference for this? I would appreciate that. Thanks.
Further, provided plan was in effect on first of year:
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If your HDHP was effective on January 1st, the total amount you can contribute to your account is the maximum contribution amount set by the IRS.
If your HDHP is effective after the first day of the month, you may make or receive a full year's contribution to your HSA for partial year coverage as long as you maintain your HDHP enrollment for 12 months. If enrollment is less than 12 months, the tax benefit is lost and a 10% penalty is imposed. There is an exception for death or disability. Previously, enrollees' contributions were pro-rated based on the number of full months their HDHP was in effect
Yes. I had an HSA when I worked. My job was terminated in September 2009. Even though I had made full contribution to HSA, I deducted eight-twelfths' that from my taxes. Obviously, I couldn't take the full deduction since I wasn't working the last four months of the year.
Plan was in effect on Jan. 1 of that year. See above.
Further, provided plan was in effect on first of year:
Thanks!
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