Who’s a dum-dum? Me. It’s me.
Want to learn how I paid a couple hundred extra dollars in taxes for no good damn reason?
Sit a spell, friends. It’s story time.
Let’s go back in time to my first “big girl” job with benefits. This would have been late 2008, early 2009. Yours truly got her own health insurance for the first time. A nice high deductible health plan with a Health Savings Account (HSA) option. Big Girl Job Company paid $1,200 into it per year on top of what I contributed.
I contributed. And sometimes I used it for eligible medical expenses.
Fast forward to 2013. I get a new job, and the HSA sort of goes off the radar.
I would periodically get emails from the HSA host bank, and since I’d forgotten my login info and never bothered resetting it, I didn’t know what the status was.
Last fall, I decided I wanted to try rolling it over into my current HSA. You can do that relatively easily without getting taxed. But, again, I put if off.
I put it off, that is, until I got an email that my account was closed. Not BEING closed, just closed.
So then I had to talk to a human on the phone. Which isn’t my favorite.
Long story short, the bank had closed my account and tried to send me a check. Because I had not been in my account since 2013, I did not update my address when we moved. The check went to our old address, and I obviously never got ahold of it. Eventually, it went to my state as unclaimed property.
THIS IS WHAT HAPPENS WHEN YOU DO NOT UPDATE YOUR SHIT:
- You have to file a claim for your property (with my state, at least). I did this over a month ago and have yet to see anything back. I know all about government time.
- A 1099 is generated for you. That means you get to pay taxes on it like it’s income…. even though the money isn’t with me yet.
- You also get to pay a 20% fee for “usage” on ineligible expenses. In this case, it was “spent” on nothing, but it went into Lalaland outside of a pre-tax account in the form of a check. In my case, it was a $500 fee.
I have few words.
Our tax preparer felt bad that she couldn’t find a way around it, but it’s on me.
So, kids, I encourage you to remain organized and keep track of your accounts. You don’t necessarily have to move them to new accounts right away, but you need to know what’s going on with them.
Please make me feel better and tell me the silliest money mistake you’ve made? Taxes or not!
-K