The truth is that the TurboTax software and the H & R Block software are written differently and you cannot compare the two outcomes until the entire tax return is complete.
The TurboTax software adds your Health Savings Account (HSA) contributions to your income until you have verified in another section that you were indeed eligible to make those contributions. The H & R Block software is seemingly making the assumption that you are eligible and would presumably add the contributions to income if it was later determined you were ineligible.
The following information will explain how TurboTax handles the HSA contribution information Entering information into your return regarding HSA contributions is a two-step process. Each step is likely to cause the refund/balance due number to change because TurboTax constantly updates the calculations as you go through the return.
The first step occurs when you enter your W-2 which includes contributions to the HSA. After entering the information from your W-2, the amounts contributed to the HSA are included in your income (thus causing a higher balance due or lower refund).
Then, the second step is to verify your eligibility to contribute to the HSA due to coverage under a High Deductible Health Plan. This results in the HSA contribution being removed from your income since you were eligible to make the contributions. Therefore the balance due amount will drop or the refund amount will increase.
To go directly to the section of your return to verify your eligibility, use these steps:
- On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
- This opens a box where you can type in “hsa” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
- The search results will give you an option to “Jump to hsa”
- Click on the blue “Jump to hsa” link and enter your information
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