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Deductions & credits
"This HSA contribution [box 12 with a code of W] by definition is employer plus employee contribution to HSA" - this is true.
"but turbotax entered all 7,884 on line 9 of the form 8889 which effectively didn't give me the income deduction for tax free hsa contributions??? " - this is not true.
The IRS calls the sum of what the employer contributes plus what the employee contributes through payroll deduction to be the "employer contribution". This is what appears both in box 12 on the W-2 with a code of W AND on line 9 of the 8889.
This "deduction" does not appear on line 12 of Schedule 1 (1040) because it's not supposed to.
Instead, the code W amount is removed from Wages in boxes 1, 3, and 5 on your W-2 before the W-2 is even printed by your employer.
That's the reason you don't see a "deduction" for the code W amount - because that amount was never in your income in the first place.
Furthermore, because your payroll contribution is treated this way, you are getting an additional tax deduction that you are not even aware of. As I said above, the code W amount is removed from Wages in boxes 1 (income), 3 (Social Security), and 5 (Medicare). This means that not only is your federal income tax reduced (because you are reporting less income), but your Social Security and Medicare taxes are also reduced.
In your case, that means you have saved an additional $603 in taxes (7.65% times $7,884) that you weren't even aware of.
From your description, everything concerning the HSA is correct on your return.