I have an HSA account that is no longer getting contributions from my former employer. I have made a personal contribution in the amount on $5,000.00 and during the online contribution process , was asked if I wanted to post this against my 2019 or 2020 account contributions. I selected the 2019 option which was the only contribution for that calendar year. When I went through the 1099-SA income portion of my TurboTax, which showed a distribution of $3,300.00 of qualified medical expenses, as I entered the personal contribution amount the updated refund box decreased unexpectedly and I received a notice that I had excess contributions, though no contributions were entered as part of my W-2 information.
I was under the impression that a contribution would lower my AGI and positively affect the refund amount.
Can you please explain the tax rule and what changes I need to make to take advantage of this tax saving opportunity.
