TurboTax correctly calculated the excess contribution to be $1,791, and added that amount to line 8 on Schedule 1 (1040) as Other Income. It did this because, as you understand, an HSA contribution made through your employer (whether by your employer or by you through payroll deduction) is removed from Wages in boxes 1, 3, and 5 before your W-2 is printed. This these dollars would not be included in your income, but since part of the contribution was in excess, the excess has to be made taxable again, which it is on line 8.
As for the $9 too much that you withdrew, please understand that the HSA is not an ordinary savings account that you can deposit money into or withdraw money out of willy-nilly. The $9 is not an excess contribution, so it cannot be treated as one. Instead, if you elect to keep the $9, when you get the 1099-SA for the $1,800 (you don't have it yet, do you?), then when it arrives, you will need to break up the 1099-SA into two 1099-SAs: one for $1,791 with the distribution code of 2, and one for $9 with the distribution code of 1. On the $9 1099-SA, when it asks if this distribution was for qualified medical expenses, answer NO, and not only will it be added to Other Income as a taxable HSA distribution, but you will also be penalized 20% on the $9 as it appropriate for a non-qualified distribution.
Yes, this means that you are changing one form and creating another form that didn't exist - but you will keep all your paperwork and notes to explain what you did and why. The point here is that the correct income will be reported, so you will be OK, in case anyone ever asks.
One alternative to the split 1099-SA is this: contact your HSA custodian and tell them that the excess amount that you had reported earlier was incorrect, that the actual amount was $1,791, which makes the other $9 a "mistaken distribution". Custodians may accept the report of a mistaken distribution (they don't have to so be nice), and see if they will convert the original excess contribution report to $1,791, and issue an amended 1099-SA for $1,791. It's worth a shot.
NOTE: if they accept your request for handling a mistaken distribution, then you fill out a form (probably online at their website) and send them a check for $9.
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