1 year ago, while filing taxes for 2023 I put more than allowed into my HSA. At the time of working with TurboTax last year, I was asked if I want to withdraw the excess or have the excess be taxed, I elected it to be taxed and as I understand TurboTax, while filing my taxes, took that into account and withdrew corresponding amount of money to IRS to cover those taxes on the excess HSA contributions. While doing that I assumed I'm sort of "done" with that excess and I can forget about it.
This year, while filing taxes for 2024, the Turbo Tax's wizard is presenting a form where one of the fields is "Excess HSA contributions carryover from 2023 still in HSA account" contains a value of 1,500 with the following note: "Note: the amount here is carried over from your 2023 return, adjust or enter the actual remaining prior year excess contribution still in your HSA account.".
Few questions:
a) Why that amount is carried over if I already paid taxes for it last year? Given I already paid taxes for it last year I didn't expect to see anything this year about the fact that I overcontributed the previous year. Am I now sort of "labeled" forever because one year I made an excess contribution and now I have to carry that burden indefinitely ?
b) Can you please help me understand that text in the note I highlighted in bold above? Based on what I should adjust that amount of 1,500 ? Just in case want to say that I did spent more than 1500 from my HSA this year.
