topic HSA Distribution used for Surgery in Get your taxes done using TurboTax

HSA Distribution used for Surgery

mvipat — Sun, 02 Mar 2025 17:05:46 GMT

We have been contributing to HSA over the years this year we used the money for surgery. This year we contributed $2000 for the whole year while for surgery and other medical expense we used $2998.97. The total balance in the account has been more than $6000 as years of contribution. Do I need to pay tax for this?

Re: HSA Distribution used for Surgery

MinhT1 — Sun, 02 Mar 2025 17:08:55 GMT

No.

If you used your HSA distributions for medical expenses, the distribution is not taxable and there is no penalty.

Please read this IRS document for more information.

Re: HSA Distribution used for Surgery

mvipat — Sun, 02 Mar 2025 20:04:27 GMT

That was my understanding too, but as soon as I enter 1099-SA I received from employed and responding to this question

Did you spend your HSA money on medical expenses only? - Yes

The tax due increases. Is this a bug in turbotax?

Re: HSA Distribution used for Surgery

mvipat — Sun, 02 Mar 2025 20:11:53 GMT

I deleted and entered all the amounts and the Federal tax due remained same. My understanding was wrong.

Re: HSA Distribution used for Surgery

AnnetteB6 — Sun, 02 Mar 2025 20:21:49 GMT

It could have been that something else triggered the change in your balance due. Take a look at your Form 1040 Schedule 1 line 8f. If your Health Savings Account (HSA) distribution is being included as taxable income, that line is where it is reported.

To preview your Form 1040 using TurboTax Online, use the following steps while working in your tax return:

In the navigation area on the left side of your screen, click Tax Tools to expand your choices
Click Tools, which will open the Tool Center
Click View Tax Summary under “Other Helpful Links…”
Click Preview My 1040 on the left side of your screen to see your actual tax form

If you are using one of the desktop versions of TurboTax, click the Forms button in the upper right corner of the screen to go to Forms Mode where you can view Form 1040 or any other form that is included as part of your return. Once you are in Forms Mode, click the form name in the list on the left side of the screen.

@mvipat