BillM223
Expert Alumni

Deductions & credits

First, did you still have HDHP coverage on September 1, 2021? Your fraction of 9/12 suggests hat you marked your spouse as covered by a Self-only plan on September 1st. That may be true, but I wanted to be sure since you moved in August. NOTE: coverage for the month is determined by the coverage on the first day of the month.

 

Assuming that 9 months is correct, you made a contribution of $4,600 to the HSA. As you note, you annual HSA contribution limit is $3,450, so you have an excess contribution of $1,150. If you have the money in the HSA, the best thing to do would be to withdraw the $1,150 before the due date of the return (including extensions). If you contact the HSA custodian, be sure they understand that this is a withdrawal of excess contributions (the may have an online form on their website).

 

If you do not have enough money in the HSA (and of course, without HDHP coverage, you are not able to add any more until you do have HDHP coverage), then the excess will carry over to 2022. You will dinged 6% penalty. However, the penalty is 6% of the lesser of the carry over or the value of the HSA at the end of the year. Thus, if your HSA value is zero, the penalty will be zero.

 

A curiosity of TurboTax is that TurboTax expects you to enter all qualified medical expenses in Schedule A, even those reimbursed by insurance or your HSA. Then, at the end of the Schedule A interview, you will be asked how much insurance reimbursement you received and there will be a screen telling you that $X was reimbursed by your HSA (you may be asked to confirm that). Any of the medical expenses not covered by the HSA will indeed count towards the Medical and Dental deduction on Schedule A.

 

Now, that you understand this, what is it that you think is not working in TurboTax?

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