Rick S

Thx Spiritrider for the detail behind your earlier posts! Rick S

QDROphile-- Thank you for your input! Rick S

QDROphile-- I am intrigued and somewhat confused by your post above. Are you saying that both parents (unmarried in this case with one child) are not allowed by law to cover their child with two separate family HDHP's by two different employers for the same child-- or are you saying that the law does not specify this scenario and by its absence or lack of specificity folks can cover their child with two separate HDHP plans if it makes sense for their situation?? Please provide some context when you can. Thank you, Rick S

Spiritrider- Thank you--I appreciate your knowledge and expertise!! Rick S

Spiritrider and others-- Your reply above got me to thinking--- If it made sense financially -- could both parents (not married) with separate HDHPs actually sign up for a family plan (i.e. the child would be on both parents HDHPs) and each contribute $7,000 to their respective HSA for 2019. In addition to the upfront family HSA tax deduction for both parents, the objective here would be to grow each HSA as much as possible (not use the HSA funds until much later in life) and pay for health expenses out of pocket until they are on Medicare. In your earlier answer to me-- I assume if the child's healthcare expenses were reimbursed using one of the parents family HSA's it would be only allowed for the parent that claimed the child as a dependent on their tax return. Thanks for your help. Rick S

Spiritrider-- I appreciate your expertise on this subject and thank you for a quick response. Many thanks! Rick S

Based on the work/life scenario listed below--- I was wondering what the maximum HSA contribution would be for both individuals for 2018. They both have separate HDHP's. My daughter and her fiancé have a child together (1 year old ) but are not married. They live and share a home (rental) together. She is claiming the child as a dependent because her income is well below $200,000 and she will be able to file as head of household and also will receive the full child tax credit of $2,000. She had a HSA (self only) for the entire year and contributed $3,450 this year. She is 39 years old. Her fiancé makes too much income to receive the child tax credit but has the child on his health insurance because the health facility/doctor choices are a little better. He will file as single for tax purposes. He also has a HSA for 2018 and contributed $3,450 (self only). He is also 39 years old. My question is: Are they maximizing their contributions to each HSA and can he actually have a family HSA because the child is on his medical plan and contribute to his HSA as a family plan ($6900)? Any guidance is much appreciated. Thank you, Rick S.

Xtitan--Sorry for the delay in replying to your message from last Friday. I appreciate the detail on a possible approach with the employer correcting /modifying the final paycheck. Rick S

Thank you Luke Bailey and XTitan for your responses. I really appreciate the feedback. I will go back and quote as you stated from IRC 457(f)(1) to see if I can determine why they wanted to have the 457 (f) plan be post tax dollars---but I'm not hopeful things will change. At a very high level, for 2018, the incremental tax increase (deducting the $6,000 457 (f) income from gross income versus keeping it in gross income) will probably result in about $265 extra we will pay in Federal taxes which means they did not withhold enough federal taxes from the 457 (f) contribution. Also, one thing it could impact eventually (I am on Social Security so I need to talk with Social Security) is Medicare part b premiums. As you may be aware, your premium for part b is based on your modified adjusted gross income and we will be close to this $6,000 pushing us into a higher premium bracket. If so, it may result in an additional $80 per month premium whenever they look at 2018 earnings. I also think we take a little hit on the Medicare Excise Tax (.09%) in 2018 (unless it was eliminated due to the Tax Act) for the extra $6,000 since we are over the $250,000 for married couples filing jointly. XTitan-- We are located in New Hampshire so thankfully individual State taxes do not apply. Thank you again for your help! Rick S.

With respect to my Wife's 457 (f) plan, she emailed the employer and stated that her 457 (f) quarterly contribution should be pretax and not post tax (Federal, Medicare and FICA were deducted) and by taxing these contributions, the SRF has been met. This is the response back from the employer--- Given the description you outlined, we felt it was important to conduct some additional due diligence and we have been advised that, with respect to the employer rather than employee contributions, the employer can establish the tax treatment of the benefit under the plan’s terms. The plan provides that the employer amounts will be contributed on an after-tax basis. Although you are forfeiting the benefit in connection with your termination, we believe the amounts already withheld on the contributions should cover your income tax liability. If you have further questions about this or believe you will have some income tax liability, please let me know. Does anyone know if the employer can tax a 457 (f) contribution upfront and then deposit the remaining money into a 457 (f) account only to state that the SRF conditions will not be met? By the way, their 457(f) plan literature clearly states taxes will be withheld and the remaining money deposited into a 457(f) account. Any feedback is appreciated. Thank you, Rick

Spiritrider, I wanted to reply based on the comments regarding ---" Your HSA eligibility ends up to six months before your Medicare enrollment" Should I be concerned with this statement? As I mentioned with my initial question ---"How much can my wife and I contribute to an HSA based on her remaining on a HDHP (for entire year of 2018) and me enrolling in medicare effective 8/1/2018, ending my HDHP coverage 7/31/2018" To date I (not my employer) have contributed $645 on a monthly basis to my HSA which will amount to $4,515 (after my July 2018 contribution) $645 x 7= $4515. Also, based on your analysis and laying out the numbers, my wife will contribute as much as $2,530.83 to her HSA sometime during 2018 --most likely as a single one-time contribution. Am I still okay --based on " Your HSA eligibility ends up to six months before your Medicare enrollment" Should I be concerned with this statement? Thanks for your help! Rick S. .

Kac1214, Thank you for the timely advise on delayed enrollment in Medicare. I appreciate the education. Rick S.

Patricia and XTitan, I appreciate the confirmation and feedback. My wife has just sent a letter to HR with much of the information everyone has provided. Thank you all for helping me sort through this issue. Rick S.

Luke Bailey, I appreciate your input and expertise regarding 457 (f's). Yes, she will easily exceed the FICA income limit with the 457 (f) income counted (or not counted) as income. I'm not certain I understand your statement "Of course, your wife got the benefit of $3,000 or so in federal income tax withholding.........." I just don't fully comprehend the benefit of having extra gross income in your year end W-2 without the benefit of receiving the net income after taxes (Federal, Social Security, Medicare). We live and work in a state that does not tax income. As a next step, would you suggest my wife have a discussion with her HR department to see if they will remove this 457 (f) income from her year-end paystub and w-2? I am also assuming the employer (not the employee) needs to issue a W-2c if a W2 has already been issued? Thank you for your help! Rick S.

Spiritrider, I appreciate your effort in explaining this to me. It does make sense when you lay it all out with the numbers. Thank you so much for the help! Rick S