My favorite author, J.R.R. Tolkien, once wrote, "Short cuts make long delays." (The Fellowship of the Ring). I say this, because doing your return by hand is a clear example of trying to do a short cut to save a few dollars, when buying the software would allow you to use the interview process, and even, better, allow you to have totally avoided the questions you are asking.
As it is, you are asking me to teach you everything to know taxwise about HSAs, and as I noted, even many tax professionals don't understand HSAs very well.
For example, I would have to start with "Employer HSA". There is no such thing. The employer might have helped you set up the HSA, but just like an IRA, an HSA belongs to you, not to your employer.
I would strongly encourage your spouse to reconsider his "thrifty" position. The step-by-step interview avoids a lot of these questions, which is more prudent than you asking whether the home run went out in left field or right field when you do not even know which ballpark you are in.
I gave you a list of questions. You answered some of them, but could not answer about the source of the $500 or whether this was dinged 6%. I can't answer your questions if you can't answer mine. Good luck with your persuasion.
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