HSA Contribution Question

[OldConch]

Greetings from Eastern Washington. I have an HSA eligible ACA plan for 2019 and a HSA non-eligible plan for 2020.

It's my understanding that I can contribute for 2019 until 4/15/20 for the 2019 year. Can anyone please confirm? Thanks.

 

[audreyh1]

Until 4/15/20 or until you file your 2019 taxes, whichever occurs first.

 

[JustCurious]

Until 4/15/20 or until you file your 2019 taxes, whichever occurs first.

Do you have a cite for that? I was not aware that filing your taxes was a deadline.

 

[Aerides]

i have done my hsa contribution the last 2 years right when I do my taxes, and we do close to the deadline in april.

 

[RunningBum]

Sorry, I don't know the answer to the question. But I have to ask:

Why would you wait to do the HSA contribution? It's got unquestionable benefit, unless you have serious cash flow issues. I always make my contribution in the first few days of January--for the present year, not the year just passed.

 

[FlaGator]

Do you have a cite for that? I was not aware that filing your taxes was a deadline.

Here's your "cite".
https://www.irs.gov/publications/p969
search for "April 15"

It took "a lot of time" to find that....search for "HSA contribution deadline IRS" and then search within the document for "April 15"

Respectfully suggest you either accept the wisdom and kindness of strangers, do your own research, or verify what you've been told.

Yes, don't have much patience with people who spend more time questioning advice on a forum than it would take to do the research themselves

 

[audreyh1]

Do you have a cite for that? I was not aware that filing your taxes was a deadline.

No can’t find it so I must be wrong although I really thought I had read precisely that more than once. Practically speaking though, do you really want to file your taxes if you haven’t yet made that final contribution you claimed? What if you forget or end up missing the deadline?

 

[JustCurious]

Respectfully suggest you either accept the wisdom and kindness of strangers, do your own research, or verify what you've been told.

Yes, don't have much patience with people who spend more time questioning advice on a forum than it would take to do the research themselves

The citation that you provided does not support Audreyh1's statement that the deadline for contributing to an HSA is "Until 4/15/20 or until you file your 2019 taxes, whichever occurs first." I was asking for a source regarding the deadline being "until you file your 2019 taxes"... I was not aware that when you file your taxes was a deadline, and the source you provided does not so indicate. Rather, the source you provided indicates that the deadline is April 15 but fails to mention "or until you file your 2019 taxes" which leads to the inference that filing your taxes is not an earlier deadline. Even Audreyh1 acknowledged that she was apparantly wrong about filing your taxes as being an earlier deadline, and I assume she realized it when she could not find a source to support it.

I respectfully suggest that if someone posts something on a public forum regarding something that they claim to be a law or a rule then it is reasonable to expect them to provide a citation or a source, and if they cannot, they should respectfully withdraw the assertion or acknowledge that they were wrong, as Audreyh1 did. You are right that I could do my own research to verify it, but even if I did that and concluded that the assertion is wrong, the incorrect information would remain for all to see.

 

[Rianne]

Why would you wait to do the HSA contribution? It's got unquestionable benefit, unless you have serious cash flow issues. I always make my contribution in the first few days of January--for the present year, not the year just passed.

This for the past 3 years. So, January 2020 will make our maximum HSA contribution for 2020. The other part about waiting until April 15 to make a contribution for 2019 is DH making IRA contribution. He'll do that in hopes market goes down. I think it's nuts.

 

[JustCurious]

Practically speaking though, do you really want to file your taxes if you haven’t yet made that final contribution you claimed? What if you forget or end up missing the deadline?

Yes, practically speaking I do want to file my tax return before I make my entire HSA contribution for the tax year because I can use the tax refund to fund the HSA contribution. I did that last year and I plan to do the same for this tax year as well. You are right that I do run a risk of forgetting or missing the deadline, but I am confident that I will not do either of those things.

 

[OldConch]

Thanks all. We're brand new to HSA's and this was the first year I had an HDHP compliant ACA plan. I opened a Fidelity HSA with $100 kind of as a placeholder just in case I needed to reduce our MAGI to stay under the ACA threshold. Turns out we didn't but... fast forward to yesterday and DW cracks a tooth.

RunningBum, you point is well taken. Having to pay for a crown for the DW made us realize the "unquestionable benefits" of an HSA. I'll contribute the max plus the catch up for +55. Seems we're very late to the HSA game but every little bit helps.


Thanks Gator and Audrey. As a practical matter, it would seem that few who know the benefits of HSA's, unlike me, would contribute after filing.

From the IRS link provided by Gator:

You can make contributions to your HSA for 2018 until April 15, 2019

 

[OldConch]

FYI - in our area the least expensive bronze HDHP HSA ACA plan is $76 more per month than the least expensive non-HDPA plan in 2020.

Marginal rate for 2020 will be 22% so I didn't choose an HSA plan in 2020. Am I missing something?

 

[audreyh1]

This for the past 3 years. So, January 2020 will make our maximum HSA contribution for 2020. The other part about waiting until April 15 to make a contribution for 2019 is DH making IRA contribution. He'll do that in hopes market goes down. I think it's nuts.

He can make the IRA contribution ahead, but then let it sit in cash until he buys something within the IRA.

 

[RunningBum]

FYI - in our area the least expensive bronze HDHP HSA ACA plan is $76 more per month than the least expensive non-HDPA plan in 2020.

Marginal rate for 2020 will be 22% so I didn't choose an HSA plan in 2020. Am I missing something?

Maybe, probably not. The obvious benefit is that tax break on the HSA contribution. 22% + whatever for state. You can easily figure that out.

The big kicker for me is that the HSA contribution reduces MAGI. In past years that just meant I had a little more room to do Roth conversions. That's a little harder to come up with a $ benefit, but it's something. This year the MAGI reduction was the difference between getting the ACA subsidy or not, which is about an $8K benefit, so the HDHP plan was a no-brainer for me.

There may also be subtle differences in the plans, so you have to make sure you've considered that. Different deductibles, OOP max, and charges for various things. I looked at various possibilities for amount and types of medical charges I might have in 2020, and the HDHP plan looks best for most cases, even though I don't expect to qualify for a subsidy next year.

 

[N02L84ER]

FYI - in our area the least expensive bronze HDHP HSA ACA plan is $76 more per month than the least expensive non-HDPA plan in 2020.

Marginal rate for 2020 will be 22% so I didn't choose an HSA plan in 2020. Am I missing something?

We too did not choose the HSA plan for next year. In our state the least expensive bronze HDHP HSA ACA plan is $364 more per month than the least expensive non-HDHP plan in 2020 and the max OOP was $2000 to $4000 more with the HSA plan. Don't think you are missing anything.

 

[Rianne]

He can make the IRA contribution ahead, but then let it sit in cash until he buys something within the IRA.

DH has an unusual way of looking at finances. He's obviously not on this forum. Many things that don't make sense. He refuses to pay himself throughout the year. So his income sits in an LLC savings account all year (he earns ~ $50K in his part time consulting from home), that earns next to nothing. I dearly love the guy. You have no idea how long it took me to talk him into contributing to his tIRA (recommended here) to lower our MAGI. Our CPA, retired this year thank the lord, was no help.
We've been on the ACA since 2013 and used to sweat our MAGI. Duh, contribute to tIRA, easy peasy. And did not understand HSA benefit and never bothered to research. Everyone's talking about the benefits of HSA's, now we get it. I tell him, I've learned so much on this forum. We've had our heads in the sand. I'm doing my best to get him to see the light