Deductions & credits

Let me rephrase what I said...TurboTax is going to subtract the amount of your HSA distributions from what you enter as medical expenses. This is because TurboTax assumes that you will list ALL of your expenses. Then, of course, you will enter any insurance reimbursements, and you don't have to list HSA reimbursements because TurboTax will do it for you.

Over time, I have come to realize that most taxpayers list ONLY the medical expenses that have not been reimbursed by insurance or other sources. And that would be fine - except that TurboTax is automatically apply the HSA reimbursements. 

So you HAVE to list any expenses on Schedule A that were paid by the HSA. This is why I suggested making a miscellaneous entry for the total of HSA expenses - not that they will be deducted but to avoid the automatic HSA handling on Schedule A from having a negative effect on your return.

Can you see your output forms? Look for Medical Worksheet - this will show you what's happening.

So you did not see this screen late in the Medical Expenses interview?

To be fair, this is from the desktop version of the software. I don't know what the Online version looks like.