Thanks for the reply.
I think I am doing what you are suggesting. Let me "quiz myself" and you can correct me.
Example:
I have $8700 of medical expenses that equal all out of pocket expenses (and assume this is over the 7.5% limit). The $8700 does not include what the insurance paid directly to providers (it is just my expenses). I have no reimbursements from insurance companies.
I pulled $2700 out of my HSA to cover part of these, so the other $6000 came out of my pocket (non-HSA funds). Note (I think this is key): The HSA funds came directly to me (did not go to the provider). I first paid the provider out of my pocket at the counter, and then reimbursed myself with the HSA funds (just moved them from the HSA account to my checking account). The HSA funds did not go to the provider from my HSA account.
I enter all of this into turbotax. $8700 expenses entered prior to the window you shared in your screen shot. The $2700 HSA entered in where turbotax takes in the HSA distribution shown on the 1099-SA form. This $2700 also automatically appears on line 13b of the Worksheet.
When I look at the "Medical Expenses Worksheet", lines 1 to 11 show all $8700 in expenses, and sum to $8700 on Line 12. Row 13b shows the $2700. Row 14 shows $6000 and this goes to Schedule A line 1.
Sound correct?
