Went back to the 2018 Tax Return in the 2018 Turbo Tax Deluxe and for step 3 Turbo Tax never asks if "all of the distribution was for qualified medical expenses", what Turbo Taxes states is "Enter Last Year's Excess Contribution. Enter the amount from line 48 on your 2017 Form 5329." (which is actual the excess amount from our 2016 contribution). When the amount is entered the next screen in Turbo Tax is "You may want to withdraw money from your HSAs. It looks like you had an excess contribution of $xxx. This amount is being taxed an extra 6%. But anything withdrawn between January 1 and April 15, 2019 avoids this additional tax." And as I stated in an earlier post that when we select "OK, we will make/have made the full $xxx excess contribution withdrawal by April 15, 2019." Turbo Tax immediately post the following statement to the page "Unfortunately, some of your excess contribution is caused by a prior year excess contribution. While it's too late to remove a prior year excess contribution, you can still remove the $xx contribution for 2018. (The excess in 2018 was already removed and the amount is included and removed no problem, but the 2016 excess amount is still there.
Turbo Tax never gets to step 4 to add that amount to Other Income (line 8 Schedule 1 (1040)), and charge you a 20% penalty.
So still need help on how to get Turbo Tax to allow us to remove the excess contibutions and pay the 20% penalty and remove this from keep coming up every year going forward.
