Deductions & credits

When you enter Schedule A, TurboTax expects you to enter all of your medical expenses, reimbursed or not. At the end of the Medical Expenses interview, you will be asked how much insurance reimbursement you received and this amount will be removed from your expenses. If you have an HSA, I believe that you now see a screen (it wasn't there in years past) that asks you to make sure that you have added any expenses that were paid by your HSA, because the amount of your HSA distributions will also be subtracted automatically from your Medical Expenses.

This is not obvious to the taxpayer, so many do not enter expenses that they know were reimbursed.

The easy way to fix this is to add up all the medical expenses that were covered by HSA distributions (probably 100%) and make a single entry in the Medical Expenses section under Other or Miscellaneous: enter "HSA medical expense offset" and the dollar amount.

This way, there will be expenses to offset the distributions against, and your return will be correct.

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