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I had a similar problem.  I think in RMD window, they are asking what you did NOT take.  Usually, I input my RMD and there is no change in taxes.  This year, the penalty is added.  In fact, I was worried that I had been over paying for years but I went into 2024's return and changed the RMD to zero to see if there was any change in taxes owed. There was not.  TurboTax, please fix this or ask the question differently.

Thank you so much.  This worked for me. I think Turbo Tax still has a bug that may only happen for people that download from Quicken or other software. I really appreciate you taking the time to help me.

Do you have a Net Profit or Loss on Schedule C for self employment?    You will pay Self Employment tax (Scheduled SE) on a Net Profit of $400 or more on Schedule C in addition to regular income tax on it.   You pay 15.3% SE tax on 92.35% of your Net Profit (If it is greater than $400).  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.   You might have some credits that could offset the tax.

@user17732630820 wrote: I think you are saying that my employer should not send a second W-2C after I repay them the income tax that was credited to my account. Is this correct? You can do either and it will come out the same on your end.   I would leave the first W-2C alone.  Yes, there is extra withholding in box 2 and box 17, but you get that back when you file your return.   I am having a hard time understanding the other option.  If they lower the box 2 and box 17 amounts on your W-2, they should be filing an amended form 941 and getting that money back from the IRS.  They would then pay that to you, not the other way around.  I think the employer has the math wrong on the second  option.  I would stick to the first W-2C, don't ask them for other corrections, and get your money back as part of your tax refund when you file your return.  

If you cashed it in, you would have a gain on the difference between the payout you received and the premiums you paid in. Follow these steps to enter the income: go to the federal income section scroll to the bottom / show less common income Miscellaneous Income, 1099-A, 1099-C, Start Scroll to the bottom Other reportable income, Start Other taxable income? Select YES Description  - whatever you want to say, something like - Life Insurance cashed out Amount, enter your amount of gain Continue

Let's do this: let's delete all your HSA data and start over again. I have done this on my tests, and I don't get a message about having an excess nor do I expect one. See HSA Reset below.   After the HSA Reset, in the HSA Interview, enter your 1099-SA, for $2,000 with code of '1' as you did before. This has the effect of chopping off $2,000 of the $3,000 carryover from 2024 which was not withdrawn in a timely manner (it should have been done by April 15, 2025), at the expense of the $2,000 being added to income on line 8f on Schedule 1 (1040) BUT leaving a $1,000 carryover to be applied as a personal contribution to tax year 2025 (line 2 on your 8889).    As you continue, when you see "Do any of these situations apply to you?" make sure to check "(you) overfunded their HSA last year". Keep going until you see "Enter last year's excess contribution". Enter $3,000 for you (I am guessing most of the contributions and spending are in/out of your HSA).   Yes, this is overriding the Carryover Worksheet because with the HSA Reset, I don't know what we did to its HSA part.   Having done all this, you won't need to see a message about excess contributions at all, so no need to see the message about how much to withdraw.    I am asking you to do the HSA Reset to erase all your HSA data because sometimes numbers get "stuck" in the HSA, as you repeatedly go through the interview trying this number or that. Once this happens, the only way to "fix" it is to start with a clean slate in the HSA space, because you can't change or rest those numbers through the interview itself. So clear out your HSA data, start over, and see if your trip through the HSA interview is quieter.   HSA RESET ***Reset***   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/Windows***   3. Go to the upper right and click on Forms, and  4. Select the desired form (1099-SA (if one), 8889-T, and 8889-S (if one)). Note the Delete Form button at the bottom of the form’s screen.   *** Desktop/Mac***   3. Switch to Forms Mode by selecting the Forms icon. 4. From the menu, select the form (1099-SA (if one), 8889-T, and 8889-S (if one)) you want to remove (if you don't see it, select Open Form at the top). From the Forms menu, select Remove [form name].   *** 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....

@j0mike1993 wrote: Maybe time to chose a different platform for taxes! You have limited options, namely H&R Block or TaxAct and neither offers anything like ItsDeductible.   There are third-party programs available if you Google "ItsDeductible alternatives".

thanks again BaldieTax.   The online bank statements go back only to 2019.    I am kinda thinking if  should just override the total basis to zero as I dont have the supporting documentation to prove the $4000 tax basis? 

@j0mike1993 wrote: Why did intuit block me from viewing the itsdeductible app? I own the app.  Intuit discontinued ItsDeductible (notice was given last year) and you never owned the app; you had a license, which was revocable (not to mention the web-based app was provided free of charge).