Question

Tia is married and is employed by Carrera Auto Parts. In 2020, Carrera established high-deductible health insurance for all its employees. The plan has a $2,800 deductible for married taxpayers. Carrera also contributes 5% of each employee's salary to a Health Savings Account. Tia's salary is $40,000 in 2020 and $42,000 in 2021. Tia makes the maximum allowable contribution to her HSA in 2020 and 2021. She received $700 from the HSA for her 2020 medical expenses. In 2021, she spends $1,600 on medical expenses from her HSA. The MSA earns $26 in 2020 and $44 in 2021. Round intermediate computations and final tax liability to the nearest dollar. Assume the max HSA contribution is the same for 2020 and 2021. a. What is the effect of the HSA transactions on Tia's adjusted gross income? The earnings of an HSA as well as medical reimbursements are excludable The maximum aggregate contribution to an HSA for a family in 2020 is $ Based on Carrera's contribution, in 2020, Tia can deduct for AGI $ b. What is the balance in Tia's HSA account at the end of 2021? Tia has $ in her HSA account at the end of 2021.

Answer 1

0 Anson: a) The maximum aggugate compatibution to an USA 40% a family in abro is [1.00The Bagnings Van Show well as medical oceimburserhents ace excluded. Based on Camucena contribution. In 2000, Tia con deduct fou AOT is 5000 2000 Working Notes Maximum contubation to an HSA : 7100 Employeur contribution - 54 Salaby in 2020 : 40000 80 40000 x 5% = 2000 Adjusted Cross Incomé 31100-2000 5100 b) Balance in TlC'S H&A account at the end of 2001 C2020) Employer contribution (2020) 40000X5% Employee contribution Cacao) Medical expense C2020) Coo) Fagining C20202 Balance at the end of 2020 6426 , Cool Employer, contribution (42000X54) Employee condubition 2020) 5000 (IGO) Eoand.ngs (20) 14 Balance at the end of 2021 5100 QI0O Medicaid ecpenses 11910

Anscoeli lia has [11940 in hen HSA account at the end of a QOQL. Working notes Employee contribution fo9 2000: Maximum contributi on to an HSA: 7100. Implayer contribution: 40000 X 5% - 0000 So. Employee conbribution for do&o is = 1100 - 2000 - 5100 Employee contribution 609.2001 Maxinum contribution 801 80d1do an HSA Employer contbilection = 12000x5754100 7100 -2100 = 5000 (ROA) Employeme_contsübution from 2021 is 500.0 Notes: The maximum cord HSA contbuibution fos , dodo land 2001 is same because in the question they mentioned that maximum Hsa Contribution is game fou both years 400 2 Please uprote
I gave detailed explanation. Please upvote. If doubt please comment.