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HSA 2015 tax year contributions

Posted: Tue Feb 23, 2016 5:57 pm
by runner23
I have a question that I was hoping to get some assistance with, as I am just starting to take advantage of an HSA. A little background first. I just turned 26 in 12/2015. Therefore, I just went on my employers health coverage after getting off my parents effective 12/24/2015. I am on the HDHP and the employer offers access to an HSA. My first contribution was from my January 15th paycheck and notated as a 2016 contribution. Now my questions:

1) Can I make a contribution to the HSA directly from my bank account and notate it for 2015?
2) I would like to contribute the 2015 annual limit before 4/15/2016. Is this possible?
3) My wife has her own healthcare through her work, but no access to an HSA. Can I contribute the family limit of $6,650 or just the individual limit?
4) If I make a direct contribution notated for 2015 then this would be a pre-tax amount, so my taxable income would be lowered. Please confirm. I owe about $4,700 of federal income tax on my upcoming 2015 return, so I am seeing if this is a way I can efficiently lower that amount.

As a note, I am using this tax deferred vehicle as a retirement tool, so any considerations to the impact on my overall AA would be helpful. I was thinking about just dumping the balance into the low cost S&P 500 fund option. However, I would not consider this in my equity exposure for purposes of rebalancing, if that makes sense.

Thanks.

Re: HSA 2015 tax year contributions

Posted: Tue Feb 23, 2016 7:54 pm
by Artsdoctor
Runner,

The IRS publication on HSAs is actually good and gives a lot of examples. The bottom line is that it all comes down to what you had on December 1, 2015. From what you're stating, your policy started after that so you are not eligible for an HSA contribution for 2015. Take a look at irs.gov since it will give you all of the information you'll need.

Re: HSA 2015 tax year contributions

Posted: Tue Feb 23, 2016 7:56 pm
by Dutch
runner23 wrote:I have a question that I was hoping to get some assistance with, as I am just starting to take advantage of an HSA. A little background first. I just turned 26 in 12/2015. Therefore, I just went on my employers health coverage after getting off my parents effective 12/24/2015. I am on the HDHP and the employer offers access to an HSA. My first contribution was from my January 15th paycheck and notated as a 2016 contribution. Now my questions:

1) Can I make a contribution to the HSA directly from my bank account and notate it for 2015?
2) I would like to contribute the 2015 annual limit before 4/15/2016. Is this possible?
3) My wife has her own healthcare through her work, but no access to an HSA. Can I contribute the family limit of $6,650 or just the individual limit?
4) If I make a direct contribution notated for 2015 then this would be a pre-tax amount, so my taxable income would be lowered. Please confirm. I owe about $4,700 of federal income tax on my upcoming 2015 return, so I am seeing if this is a way I can efficiently lower that amount.
1) No, it has to through payroll deduction in your case.
2) No, the payroll deductions would have to have been before 12/31/2015 to count towards 2015
3) My understanding is just the individual limit (somebody please correct me if I'm wrong on this)
4) Your HSA contributions do lower your taxable income, but you're too late for 2015

Re: HSA 2015 tax year contributions

Posted: Tue Feb 23, 2016 8:03 pm
by nps
You can't make any contributions for 2015 if you were claimed as someone's dependent in 2015 or if you did not have HDHP coverage on the first day of at least one month in 2015.

For you and your spouse, are both insurance plans self only? Are both High Deductible Health Plans?

If you're using the HSA as part of your retirement portfolio, I don't see why you wouldn't include its investments in your portfolio AA. If you don't want to specifically rebalance the funds in your HSA, you could rebalance with your other retirement accounts to achieve the same overall effect.

I'm not sure why a previous poster stated that contributions need to be payroll deductions in your case. Many HSAs accept contributions from your own bank account, even those set up through an employer.

Re: HSA 2015 tax year contributions

Posted: Tue Feb 23, 2016 8:16 pm
by JoeJohnson
Dutch wrote: 1) No, it has to through payroll deduction in your case.
2) No, the payroll deductions would have to have been before 12/31/2015 to count towards 2015
Clarification on the bolded above. The typical deadline for HSA contributions is the tax filing deadline. Contributions typically do not have to go through payroll or occur before 12/31. In this situation, the person asking the question is not eligible for 2015 contributions.

If contributing outside of payroll, you'll lose the FICA benefit of contributing through the payroll cafeteria plan.

Re: HSA 2015 tax year contributions

Posted: Tue Feb 23, 2016 8:44 pm
by runner23
Thanks for the quick responses. Cleared that up. I appreciate the help.

Re: HSA 2015 tax year contributions

Posted: Wed Feb 24, 2016 7:04 pm
by FiveK
nps wrote:You can't make any contributions for 2015 if you were claimed as someone's dependent in 2015 or if you did not have HDHP coverage on the first day of at least one month in 2015.
And the inverse is that if you were not someone's dependent and your coverage was under an HDHP account for 2015, you are eligible to create and fund an HSA for 2015.