Form 8889 = obtuse... I deleted my opinion on it from my last post; your description is charitable.
😄
Quoting (**):
** You entered a 1099-SA, right? It had the amount of $3,086, right? It had the distribution code of '1', right? And because of the '1', TurboTax asked you how much of the distribution was used for qualified medical expenses (and you said all, right?).
All correct. Except that I have two 1099-SAs, because the employer switched HSA administrators in 2024 (insert eye roll). For the two 1099-SAs, the box 1 amounts total $3086, and are both coded 1. That entire amount was used for qualified medical expenses.
** So it is correct that line 16 (8889) is zero, because you had zero taxable distributions on the one 1099-SA that you entered. Since the 1099-SA for the excess contributions (which turns into a distribution if the contributions were through the employer) is usually received a year later (i.e., your 1099-SA with $743 in box 1, some unknown amount of earnings in box 2, and code '2' in box 3), should arrive in time for your 2025 return, in early 2026.
Understood.
** Now, I have made some assumptions on what you did; would you please confirm them for me? And does line 16 being zero now make sense?
Yes, confirmed as best as I understand. I do not have confusion over why 8889 line 16 is zero ... my confusion comes because the 8889 line 16 instruction says to take that amount (= 0), and include it on Schedule 1 Line 8f (along with any amount from 8889 Line 20, which on my form is blank). But when I look at Schedule 1 on TT, I am seeing the $743 amount. The TT Smart Worksheet above 8889 line 13 shows the excess contributions ($743, item A on that worksheet), and the excess withdrawn after the end of the year ($743, item B on that worksheet), to arrive at item C = zero on that worksheet, so Line 13 = zero.
8889 line 13 does not appear to have anything to do with lines 14 through 16. But that $743 amount is there on TT Schedule 1 line 8f. As it's the same value I am seeing in the Line 13 workup, I'm assuming somehow that line 13 is where Sch1 is finding the $743 that appears on line 8f.
The IRS instructions ^appear^ to allow me to spend down the HSA excess contributions prior to filing for 2024, and eliminate this showing up as additional income. If this interpretation is not correct, please let me know. But my main heartburn still resides with 8889 line 16 = $0, but the amount appearing on Sch1 line 8f = $743, and I still do not understand why. It ^looks like^ a TT software error, but it may be an IRS thing that's completely opaque per any documentation I have seen.
