TurboTax does not report excess HSA contributions in the Review or SmartCheck, it does it in the middle of the HSA interview. When TurboTax announces the excess contributions, on the same screen it asks if you want to withdraw, all, some, or none of the excess.
Anything you don't withdraw becomes a carryover to the next year, and is dinged 6%.
What you need to do is look at your 2023 return for a form 5329. If you had a number in line 47, then you had excess HSA contributions for 2023.
The excess that is carried over to 2024 is placed on line 2 form 8889 so it will be a "personal contribution" in the next year. If you don't reduce your contributions in 2024, then you are likely to have excess contributions again, given your 2024 contributions plus your 2023 carryover.
But when you try to withdraw the carryover in 2024, TurboTax (well, the IRS really) won't let you withdraw 2023 carryover. Instead, it carries over again until you still have HDHP coverage but you control your contributions so that the carryover can be used up in the current year.
Otherwise, you have to take a distribution for the original excess and say that it was not for medical expenses, which will make the distribution added to Income as well as a 20% penalty.
Anyway, take a look and see what happened in 2023.
@PW2025
@Chadfender92
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