So I now realize that if I manually override the interview in turbotax, I no longer can efile. That makes turbotax useless to me. So now I am trying to address this in 2 steps: 1) determining line by line in form 8889 what the correct entries are and 2) figuring out how to answer the interview questions to populate the lines in 8889 correctly. Step 2 is where I am stuck.
So this is what I think 8889-S entries should be:
Line 1:Family
Line 2: 0
Line 3: 2400 (7200/4 months)
Line 4: 0
Line 5: 2400
Line 6: 0 (2400 carried to spouse)
Line 7: 333 (over 55, 1000/4)
Line 8: 333
Line 9: 0
Line 10: 8200 (Qualified HSA funding distribution)
Line 11: 8200
Line 12: 0
Line 13: 0
Line 14a: 8200
Line 14b: 8200
Line 15: 0
Line 16: 0
Line 17: 0 (no additional tax)
Line 18: blank
Line 19: 0 (even though I took a Qualified funding distribution, I returned it, so it should be zero, I think?)
line 20:blank
Line 21: blank (no additional tax)
To get the interview questions to populate this as above and be able to efile, it seems I have to answer them incorrectly. Turbotax doesnt seem to transfer an answer to later in the interview:
Under wages and income, HSA section:
1) I choose HSA for spouse
2) I enter the 1099-SA received, 8200 gross distribution, 0 earnings, distribution code 2 excess contributions
3) excess contribution not deducted from wages
4) HSA not inherited
5) HSA contributions: 0 for all entries
6) No employer contributions
7) no medicare
😎 Covered by HDHP at least one month, different plans at different times
9) HDHP family plan jan, feb, mar, apr, none for remainder of year
10) WHO MADE excess contribution of $7867? Spouse (note that it says 7867, not 8200). This is problem 1 in the interview
11) Did not overfund in 2020
12) LOOKS LIKE excess contribution of 7867. Chose we will withdraw full excess contribution (no option to pick a number 8200, can only pick 7867)
13) Done with HSA summary
14) Qualified HSA funding distribution - now it asks if I will meet the conditions, which I do not. That was why I returned the money. This question seems like turbotax doesnt understand the prior section questions that I refunded the money and asks again. If I choose no, I do not meet the conditions, then turbotax populates line 19 with 8200 and puts an additional tax on line 21. I have to put yes, I will meet the conditions to avoid the tax, even though I dont meet it and return the $. Is this what I need to do, answer the question wrongly so it can populate form 8889-S correctly?
