topic Owing money when I paid with HSA more. in Deductions & credits

Owing money when I paid with HSA more.

Tyler64 — Tue, 18 Feb 2025 02:37:05 GMT

My wife and I are trying to figure out why we owe money this year while we had a big refund last year. Jobwise there's been no change, no increase in pay. A small amount more interest..... Yet we've gone from around 1200 refund last year to owing around 400 this year.

We have 2 kids and my wife only claims 1 and I claim 0. Last year we only had 1 kid and only claimed one

The only big change seems to be that we spent around $1,000 of my HSA and this year we've spent around $6,000 of my HSA. I've actually contributed LESS to my HSA this time around so there's no way I've over contributed.

But the HSA is the only thing that is noticeably different.... Are you supposed to pay taxes on your HSA used only for medical expenses and while you have a high deductible plan????

Re: Owing money when I paid with HSA more.

MindyB — Tue, 18 Feb 2025 02:42:52 GMT

No, HSA withdrawals are not taxable when used for medical expenses. Let's revisit the HSA entry and make sure everything looks correct.

Click on Federal Taxes, Deduction & Credits
Choose "add/edit" HSA, MSA Contributions
You will see a page titled "Your HSA Summary" which will show any deductions already computed from your W-2
Choose Edit, Check the box for HSA, Continue
You'll now see a screen that says "Here's what we have so far" with the information from the 1099-SA, choose "Edit"
After the entry screen for the amount distributed, approximately $6,000, continue and when it asks, "Did you spend your HSA money on medical expenses only?" Answer "Yes."
Choose done and continue until you get to a screen that says "Let's enter your HSA contributions"
In the box "Any contributions you personally made (not through your employer)" DON'T enter the amounts you contributed through paycheck withholding. It has already been considered through your W-2 entry.
Continue on until you are asked if you were covered by a High Deductible Health Plan (HDHP) in 2024? Answer "yes" and beneath that, indicate you had a family plan all year, if you did.

Re: Owing money when I paid with HSA more.

Tyler64 — Tue, 18 Feb 2025 20:45:02 GMT

Turns out it wasn't the HSA at all. When filling out something from my wife's W2 she had entered a wrong letter (well, actually it was supposed to be something like..... it was bb and she entered b).

We never looked at the W2 info because we thought surely there's nothing wrong there, everything else was mostly the same minus the HSA use, which made no sense and made me think TurboTax was somehow miscalculating something.