The $790 is a 10% penalty on contributions to an ineligible HSA. Attempted a screen capture to no avail. Here is the text:
Form 8889, pg 2, Part lll, Lines:
18 Last-month rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
19 Qualified HSA funding distribution . . . . . . . . . . . . . . . . . . . . . 19 7900.
20 Total income. Add lines 18 and 19... . . . . . . . 20 7900.
21 "Additional tax. Multiply line 20 by 10% (0.10)" - 21 790.
Additionally, Schedule 1, Additional INCOME, Line 21:
21 Other income. List type and amount [Form 8889 Health Savings Accounts 7,900 ] 21 7,900.
The withdrawal is recorded as income, even though the contribution was listed as "personal" not through an employer, and I made the selection that I would withdraw the fund (not sure I needed to claim over half to withdraw) . Those funds are already being taxed as income on Form 1040 Lines 1-5b. TTax counts the withdrawal as income, taxing us again on the funds on 1040 Line 6 along with state refunds from last year. I had already filed a few days ago, and didn't see this until I was printing a hard copy of the return for file. I will have to amend the return, but after going back and looking, I am pretty sure TTax is not gathering enough information on Form 8889 to accurately allocate contributions, withdrawals, and penalties in our case.
Also, when I click "amend" to work on the errors, I get a notice saying I have already amended one (of 2) of my state returns electronically, so I will have mail any future amendments to the return. I have not filed any amendments, don't know why I'm getting this message. Is there a way to reset it?
.
