HSA Tax Question

Dec 5, 2008

  1. joshril
    Offline

    joshril Guru

    Posts:
    1,326
    Likes Received:
    3
    State:
    Oregon
    My understanding is as long as an HSA is established before the end of this year, I can contribute my maximum 2008 amount. Is this correct?
     
    joshril, Dec 5, 2008
    #1
  2. GreenSky
    Offline

    GreenSky Guru

    Posts:
    15,339
    Likes Received:
    453
    State:
    Nevada
    If both the insurance policy and account are started by 12/31, you're good to go.

    Rick
     
  3. STIBROKER
    Offline

    STIBROKER Like My post and enter the DRAWING,,,, Moderator

    Posts:
    10,485
    Likes Received:
    405
    State:
    Texas
    yes...
     
  4. joshril
    Offline

    joshril Guru

    Posts:
    1,326
    Likes Received:
    3
    State:
    Oregon
    Thanks and thanks! That's what I thought...
     
    joshril, Dec 5, 2008
    #4
  5. somarco
    Offline

    somarco That Medicare Expert Guy

    Posts:
    29,031
    Likes Received:
    2,633
    State:
    Georgia
  6. joshril
    Offline

    joshril Guru

    Posts:
    1,326
    Likes Received:
    3
    State:
    Oregon
    joshril, Dec 5, 2008
    #6
  7. livebetter
    Offline

    livebetter New Member

    Posts:
    13
    Likes Received:
    0
    In the link provided by samarco, if you look just below the contribution amounts, about 1/4 of the way down the page, you will find,

    "*These are annual contribution limits, and would presume the HSA-eligible individual to have coverage for the entire year. These contribution limits would be reduced by 1/12th for each month in the year the individual is not HSA-eligible.".

    ..which seemed to indicate that you might not be able to take the full deduction.

    However, I took the tedious road of reading through IRS Publication 969 to find...

    "Last-month rule. Under the last-month rule, if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers), you are considered an eligible individual for the entire year. You are the treated as having the same HDHP coverage for the entire year as you had on the first day of that last month.

    Testing period. If contributions were made to your HSA based on you being an eligible individual for the entire year under the last-month rule, you must remain an eligible individual during the testing period. For the last-month rule, the testing period begins with the last month of your tax year and ends on the last day of the 12th month following that month. For example, if you fail to remain an eligible individual during the testing period, other than because of death or becoming disabled, you will have to include in income the total contributions made to your HSA that would not have been made except for the last-month rule."

    If your thirst for HSA information continues, you can visit irs.gov and search for form 969. The above quote is from page 4.

    I tried to post the direct link, but I'm too new to this forum to be allowed to post links yet.
    :mad:
     
    Last edited: Dec 5, 2008
  8. somarco
    Offline

    somarco That Medicare Expert Guy

    Posts:
    29,031
    Likes Received:
    2,633
    State:
    Georgia
    Essentially, yes.

    Livebetter has expounded on the recent changes.

    You get the full deduction, but there may be a tax liability if you are not eligible for the HSA for the full 13 months.
     
    somarco, Dec 5, 2008
    #8
Loading...