Deductions & credits

Yes, you do need to report this income.  You are correct, since you have a gain of less than $250,000 and lived in the house well over the 2 out of the last 5 years, you meet the criteria to exclude up to $250,000 of a gain.

If your taxes due jumped after entering the 1099S, did you enter your cost basis?  If not, and you only entered the sales price, you would have a capital gains of $380k. 

If you did enter the cost basis and sales expenses, go back through and double check your answers to be sure you selected that it was your primary home and that you did NOT use it for any other reason and that you did NOT sell another main home in the last 2 years. 

When you complete those steps, you will get to a screen that says Exclusion of Gain.  Good News!! You don't have to pay any income tax on this sale of your home.