Deductions & credits

There will be two parts to this answer; please read both.

***Part I***

First of all, let's address the "I cannot change it now." Sometimes when you make an entry in TurboTax, it remembers the entry and because of the dynamic nature of the screens it shows you, you may never see the screen again that you want to make a change (the amount of excess that you agree to withdraw is one such example).

So the best thing to do in this case is to delete your HSA information and start over. To do so, please read the following:

The safest - although brute force - way to fix this is to do the following in this order:

1. make a copy of your W-2(s) (if you don't have the paper copies)

2. delete your W-2(s) (use the garbage can icon next to the W-2(s) on the Income screen

*** Desktop***

3. go to View (at the top), choose Forms, and select the desired form. Note the Delete Form button at the bottom of the screen.

*** Online ***

3. go to Tax Tools (on the left), and navigate to Tools->Delete a form

4. delete form(s) 1099-SA (if one), 8889-T, and 8889-S (if one)

5. go back and re-add your W-2(s), preferably adding them manually

6. go back and redo the entire HSA interview.

***Part II***

Note that all HSAs are for a single person; that is, an HSA is either yours or your husband's. It is the HDHP coverage that can be Family or Self.

It is possible that your husband had Family coverage when he had the only HSA. Then when you started your own HSA, you may have had Family coverage in your HDHP. And when your husband had an "individual HSA", he may have had Self coverage. You may need to consult with the appropriate HR or benefits department to confirm the status of your HDHP coverage at any one time.

HOWEVER, what is important is that in any month that either one of you had Family coverage in your HDHP, then BOTH of you report Family coverage, not matter what your individual HDHP says. This is because the Family limit of $6,900 applies to both of you in the aggregate.

Once you understand this, you may need to go back and amend your answers in the HSA interview. Before you do that, please read the following information about how you can accidentally indicate to TurboTax that you made an excess contribution when maybe you didn't.

One of the purposes of the HSA interview is to determine your annual HSA contribution limit.

As you probably know, the maximum limits in 2018 are:

• $3,450 - individual with self-coverage
• $6,900 - individual with family coverage
• If the HSA owner is 55 or older, then you add $1,000 to these amounts.

However, these limits assume that you were in an HSA all year. If you left the HSA during the year or started Medicare or had one of a number of change events, then the limit is reduced.

There are several major culprits for excess contributions (other than just actually contributing more than the limit).

First, if you did not complete the HSA interview - that is, go all the way until you are returned to the "Your Tax Breaks" page - the limit still might be set to zero, causes a misleading excess contribution message.

There are questions all the way to the end of the interview that affect the annual contribution limit.

Second, it is not unusual for taxpayers to accidentally duplicate their contributions by mistakenly entering what they perceive to be "their" contributions into the second line on the "Let's enter your HSA contributions" screen (see screenshot below).

Normally, any employee who made contributions to his/her HSA through a payroll deduction plan has the contributions included in the amount with code "W" in box 12 on the W-2. This is on the first line on this screen (above). Don't enter the code W amount anywhere on the return other than on the W-2 page.

Third, if you weren't in HDHP coverage all 12 months, then the annual contribution limit is reduced on a per month ratio. NOTE, this means that you have to indicate when and under what type of HDHP plan you had. Be sure to answer the questions on the screen entitled "Was [name] covered by a High Deductible Health Plan in 2018?" (see screenshot below).

Fourth , if you had a carryover of excess contributions from 2017, then this carryover is applied to 2018 as a personal contribution, which could cause an excess condition in 2018 as well. But note: if you had an excess contribution in 2017 but cured it by withdrawing the excess in early 2018, then do NOT report an "overfunding" on your 2018 return.

Fifth, the Family limit ($6,900) is for the aggregate of contributions by both taxpayers, even if both taxpayers have their own HSAs. That is, one taxpayer can’t contribute $6,900 to his/her HSA and the other contribute $3,450 to the other HSA – the $6,900 limit applies to the aggregate of all HSA contributions credited to the family (in this case, the excess contributions would be $3,450).