Hi Bill,
Thanks for the reply.
I checked the box indicating the funds were used for authorized medical expenses. I also checked the form (used the turbotax "View pull down tab") to see the the box on 1099-SA in turbotax has the box checked indicating the funds were used for qualified medical expenses (it is checked).
I am basically done with my taxes (all data entered and can submit).
I decided to do one last review. I changed the HSA distribution amount to see if it influenced my MAGI. I reduced the HSA distribution I received drastically. I figured the amount of tax owed should not change. It did (taxes owed go up when I increase the HSA distribution, and go down when I decrease the distribution). MAGI does not change.
In the "Summary form", it looks like I might owe a tax penalty. Increasing the HSA distribution also increases the tax penalty. Seems like my HSA distribution from 1099-SA is being treated as taxable income. Maybe I'm pressing (or not pressing) the correct button?
Any thoughts??
Thanks!
