You may use funds in an HSA for any qualified medical expenses for yourself, your spouse or your dependents, regardless of whether you have met the deductibles in your insurance plan. The deductibles determine whether your plan is eligible for HSA contributions, but do not control when you may spend funds.
On your tax return, you must report your withdrawals (you will get a tax statement from the HSA bank called a 1099-SSA). Turbotax will ask if all the withdrawals were spent for qualified medical expenses, if you say yes, the withdrawals are not taxed, and if you say no, the withdrawal is subject to income tax plus a 20% penalty.
You are responsible for proving, if audited, that you only requested reimbursement for qualified medical expenses. You do not send receipts to the IRS with your tax return, but you should keep your receipts and other records for 3 years. The HSA bank may not may not ask for proof to go with your expenses, but you must keep your own records.
The HSA bank must issue a 1099-SSA in January to report your withdrawals, and must issue a form 5498-SSA to report your contributions, that's usually not issued until May, and you will need to use your own records to report your contributions on your tax return. The HSA bank may also issue monthly or quarterly statements like any other bank, that will depend on the bank.
In addition to reporting withdrawals on your tax return, you must also report contributions, and there will be a check box to certify that you are enrolled in a qualified HDHP. If your only contributions come from payroll (whether it's your money or an employer contribution) that will be on your W-2 and automatically detected by the program. There is also a place in the program to manually enter contributions, the only thing you will enter here is extra contributions made outside of payroll, don't enter your payroll contributions again.
