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HSA limits for 2018 revised

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Unfortunately, some people followed this snippet from IRS Notice 2004-2, Q&A 21 to the letter and contributed $6900 at the beginning of the year.

"Although the annual contribution is determined monthly, the maximum contribution may be made on the first day of the year."

Now couple this with the fact that any HSA custodian I know charges a $20 - $25 fee to remove excess contributions and earnings.

If their custodian will not waive this fee, they would be better off leaving the excess in the account and file Form 5329 and pay the $50 * 6% = $3 excise tax.

Any chance the IRS would determine that even this small penalty would be "against equity and good conscience"? After all the IRS was the one who told them what the contribution limit was and the following of IRS guidance put them in these circumstances.

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This might be of interest:  https://www.winston.com/en/benefits-blast/2018-hsa-family-contribution-limit-reduced-by-50-adoption.html

" A number of organizations and trade groups have approached the IRS to discuss transition relief or other solutions that would minimize disruption and unexpected administrative burdens imposed on employers and individuals."

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