Need confirmation: TIRA W/D, HSA, and ACA income

[Carpediem]

Looking for some confirmation on the following:

- First year on ACA and attempting to manage income for subsidies - staying in the $60-$65k range.

- Currently have a Fidelity HSA, which I haven't added to this year yet. Looking to add $8k to it.

- I would withdraw from my TIRA and make an HSA contribution in the same amount. Let's say that my 'ACA income' is currently $60k-$65k and I want to make a $8k contribution to my HSA.

- If I withdraw $8k and make a $8k contribution to HSA, am I still okay if my 'ACA income' is currently in the $60-$65k?

(I know what I'm trying to ask - I just don't say it very well! )

Thank you!

 

[MichaelB]

Yes, when you withdraw the $8k from the tIRA it is taxable income, and when you add the $8k to your HSA it reduces your MAGI by the same amount, so the net is 0.

 

[Carpediem]

Awesome, that's what I thought. Thanks, Michael!

 

[GoodbyeYellow]

I guess this is the case for OP but I believe you actually need to be enrolled in a HDHP to do this?

 

[teejayevans]

I guess this is the case for OP but I believe you actually need to be enrolled in a HDHP to do this?

Yes.

You can also do a one time direct IRA to HSA rollover.

 

[Carpediem]

Yes.

You can also do a one time direct IRA to HSA rollover.

Thanks for mentioning the direct IRA to HSA rollover. I had been wondering about that because VG will withhold taxes when I withdraw from my IRA, which I don't want in this situation.