Deductions & credits

Some HSA accounts have investment options within the HSA account.  However, it sounds like you withdrew the money from the HSA to invest in a separate investment account. In that case you have an unqualified withdrawal and oh the penalty.

If you believe that you invested the money within the HSA, then you should not have received a 1099 form and you would need to call the bank to figure out whether they reported it correctly or not.

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