If you have an HSA, TurboTax works in a non-obvious way that can confuse you.
When you enter your medical expenses in the Medical interview as noted above, TurboTax expects you to enter ALL of your medical expenses, even the ones reimbursed by an HSA distribution.
Why? Because TurboTax will automagically subtract the amount of the HSA distributions from your listed medical expenses, in order to get to the right number as described above for Schedule A.
There is a screen at the end of the Medical interview that mentions this, but I have noticed that a number of taxpayers either miss this screen or don't understand what it means.
Since most taxpayers tend not to enter in the Medical interview medical expenses that they know were reimbursed from an HSA, rather than going back and adding all the individual medical expenses (that were reimbursed), it's easier to just make a single Miscellaneous entry at the end of the Medical interview with the description of "HSA reimbursed expenses" and the dollar amount of the HSA distribution (from the 1099-SA).
So, to follow the example above, if you had $10,000 in total medical expenses, $4,000 of which were reimbursed from your HSA, you would either (1) enter all $10,000 of the expenses in the Medical interview (knowing that TurboTax was going to subtract the $4,000 out), or (2) enter the expenses for the $6,000 that was not reimbursed and a single miscellaneous entry of $4,000 for "HSA reimbursed expenses".
Note that in either case, if the non-reimbursed medical expenses exceed the 7.5% Schedule A limit, then the excess will appear on Schedule A (if you can otherwise itemize your deductions).
