Some people avoid using an HSA because they worry about getting something wrong. The good news is that If you break an HSA rule by contributing too much or spending on the wrong expenses, that’s okay and often fixable!
If you are tracking your HSA activity and notice an error before tax filing time, you can try to work with your HSA provider to fix it.
We aim to help you avoid mistakes by providing you with knowledge and tools (like the HSA Store Eligibility List and Expense Dashboard) to use your HSA confidently.
Accidentally contributing more than the annual limit
When it comes to HSA contributions, there is a strict annual limit defined by the IRS for each tax year. For 2024, this amount is $4,150 for individuals and $8,300 for families. The total amount of money contributed to your HSA — through an employer and directly on your own — cannot exceed the maximum limit for the year.
Your HSA provider likely helps you track how much you have spent and how much you have left before hitting the limit. If you are tracking your contributions diligently and you’ve over-contributed, you may be able to contact your HSA provider to reverse the mistaken contribution.
If you contributed too much and have not been able to correct the issue, you will need to fill out Form 5329 with your taxes, which has instructions on how to do it. The IRS charges tax on the extra amount..
Accidentally using HSA funds on non-qualified expenses
HSA Store helps you avoid missteps with your HSA by providing an Eligibility List for you to check and double check before using HSA funds.
If you catch an error before you are filing taxes, you may be able to correct it early by working with your HSA provider to send that amount of money back into your HSA.
If you accidentally spend HSA money on "non-qualified medical expenses" and aren’t able to correct it, the IRS treats it like taxable income. They will also add an extra 20% tax on top of it all.You would use Form 8889 to report this information at tax time.
Summary: What is an HSA and how can I save money?
If you accidentally contribute more than the annual limit or use HSA funds for non-qualified expenses, you may be able to work with your HSA provider early to make corrections before it’s time to file your taxes.
