Roth Contribution Amount (RSUs income - HSA contribution)

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diy60
Posts: 175
Joined: Wed Sep 07, 2016 6:54 pm

Roth Contribution Amount (RSUs income - HSA contribution)

Post by diy60 » Wed Sep 12, 2018 3:00 pm

I saw a reply in this thread by Spirit Rider that I now question if I contributed too much to a Roth this 2018 tax year.
viewtopic.php?f=1&t=258634&p=4113190#p4112756
Spirit Rider wrote:
Mon Sep 10, 2018 8:52 pm
See Publication 590-A What Is Compensation? For a W-2 employee this is your W-2 Box 1 + Box 11 (if any). The $8200 is reduced by any pre-tax deductions (403b, pension, HSA, Section 125 employee benefits share, etc...). Income tax and FICA deductions do not reduce your compensation.

Note: If you have a Roth 403b option at your work. You could make Roth 403b contributions for one month and it would not prevent an $6500 Roth IRA contribution. If your employer allows a >= 75% 403b contribution, in three months you could max out the 2018 $19,000 403b contribution limit with ~$0 for a pay check and still make the $6500 maximum Roth IRA contribution for 2019.
I'm retired and my only source of taxable compensation is vesting of my RSUs (restricted stock units, say $10,000 for 2018). I also contributed the max directly to my retiree healthcare family HSA savings account (wrote a check for $7,900). I contributed $10,000 total split between my Roth IRA and spouse's Roth IRA. Based on the above reply, I'm thinking I may only be eligible to contribute $2,100 (10,000 income - 7,900 HSA contribution). Can someone verify if this is correct? If so, looks like I may need to search how to correct the excess contribution.

Spirit Rider
Posts: 8902
Joined: Fri Mar 02, 2007 2:39 pm

Re: Roth Contribution Amount (RSUs income - HSA contribution)

Post by Spirit Rider » Wed Sep 12, 2018 4:12 pm

diy60 wrote:
Wed Sep 12, 2018 3:00 pm
I saw a reply in this thread by Spirit Rider that I now question if I contributed too much to a Roth this 2018 tax year.
viewtopic.php?f=1&t=258634&p=4113190#p4112756

I'm retired and my only source of taxable compensation is vesting of my RSUs (restricted stock units, say $10,000 for 2018). I also contributed the max directly to my retiree healthcare family HSA savings account (wrote a check for $7,900). I contributed $10,000 total split between my Roth IRA and spouse's Roth IRA. Based on the above reply, I'm thinking I may only be eligible to contribute $2,100 (10,000 income - 7,900 HSA contribution). Can someone verify if this is correct? If so, looks like I may need to search how to correct the excess contribution.
If your $10,000 in RSUs show up on your W-2 Box 1, you are fine.

Only HSA contributions by payroll deduction thru a Section 125 plan, reduce your W-2 box 1 compensation. Direct HSA contributions are deducted on Form 1040 Line 25. While they are an adjustment to income and reduce your AGI and thus taxable income. They do not reduce your compensation.

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