Thank you George for that fast reply. I understand the concepts you're saying I think:
- I over-contributed $1791 and was returned that amount from the HSA (part of the overall $1800 distribution). Therefore that $1791 amount goes on 1040 line 8 as income (since it was never taxed). This part is simple at first sight...
After that I am still confused unfortunately. I have a 1099-SA that says $1800 was a 'distribution code 2' (excess contribution withdrawal). Clearly that's not true but I guess the HSA provider is showing that because that's what I asked them to withdraw as excess. But when I punch this into Turbo Tax it is not asking me about the $9 difference anywhere. It's not asking me at all about the "Did you spend all the money you took out on medical questions?".
I am thinking that Turbo Tax should be putting all $1800 onto the line 8 (for income) so I can be taxed on it. OR it should be putting $1791 like it has, and then doing something else with the extra $9. Because right now I don't think that $9 is accounted for as an HSA distribution (qualified or not) and it not accounted for as income.
PS Our HSAs are reported in W2 box 12-w
