Form 889

[landbl1227]

Form 8889 line 116 says "Subtract line 15 from line 14c.  If zero or less, enter -0-.  Also, include this amount in the total on Schedule 1 (Form 1040), Part 1, line 8f.   Schedule 1 (Form 1040), Part 1, line 8f says "Income from form 8889".  Turbo tax does not put the correct amount on Schedule 1 (Form 1040), Part 1, line 8f, it's entering a larger number.  The lines after line 16 on the 8889 all add up to 0 so there should be nothing else to add.

[BillM223]

"The lines after line 16 on the 8889 all add up to 0 " - just to confirm, these lines add up to zero, or ARE zero?

[landbl1227]

They are 0.

[BillM223]

As you seem to already know, lines 16 and 20 on the 8889 get added together to go on 8f on Schedule 1. But this isn't working for you, since the number in 8f (schedule 1) is not equal to lines 16 + 20 on the 8889.

Unfortunately since we in the Community cannot see your private tax data but know only what you can tell us, I have to start a game of twenty questions. 

What is the difference between the amount on line 16 (8889) and line 8f (Schedule 1)? Does this number appear elsewhere on your return?

Let me also assure you that I have been answering HSA questions for 8 years now, and I have never seen this error, so we will be able to work it out.

[beach_bob_juno]

I am seeing the same problem as the OP: having plugged in the numbers from my 1099-SA, form 8889 line 16 calculates to 0. So the zero amount is to be included on Schedule 1 line 8F, but TurboTax is showing the 8f line amount to be $743, not zero. Somewhere during the interview, TT did ask if I had spent this excess amount on qualified healthcare expenses, and I answered yes, because have spent in excess of the $743. Shouldn't line 8F be zero?

[beach_bob_juno]

PS - form 8889 entries 17b through 21 are all blank.

[BillM223]

As perhaps you have seen in the 1040 Instructions (page 87), line 8f on Schedule 1 (1040) is to be the sum of lines 16 and 20 from form 8889. But in your case, you report that 0 + 0 = 743, right?

As I said, I have not seen this happen before, is it possible that you have made multiple passes through the HSA interview, sometimes showing excess contributions and sometimes not? There is something that happens occasionally in that a number gets "stuck" in TurboTax and doesn't change when other numbers change around it. This creates nonsensical situations where numbers seem to come out of nowhere.

Also, please tell me that you are entering all HSA through the Step-by-Step process, not in Forms mode. Entering data in Forms mode for the HSA can easily lead to errors.

If you are willing, let's do an HSA RESET, to remove all HSA information from your return so you can start over. This is not a button, but a process.

***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***

3. go to View (at the top), choose Forms, and select the desired form(s) - 1099-SA (if one), 8889-T, and 8889-S (if one). Note the Delete Form button at the bottom of the screen.

*** 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....

Let me know how this works for you.

[beach_bob_juno]

Thanks for the reply, BillM. I'm going to try doing the HSA reset, because I haven't tried that yet... Apologies for the slow reply; I was out of town for a long weekend. 

[BillM223]

I hope you had a good long weekend and that the result of the HSA reset is a clean start that works for you this time.

Let us know how it goes.

[beach_bob_juno]

Ok, the redo:

I deleted these forms: W-2, 1099-SA, 8889-T, 8889-S, and I also deleted Schedule 1 because I had previously done an override on Line 8f that had to be undone.
I then re-entered all the pertinent forms: W2 and 1099-SA.
I am still seeing the discrepancy between form 8889-T, line 16 (= $0), and Schedule 1 line 8f, which is still showing the $743. Sch 1 line 10 total = $743, which carries over to 1040 line 8 (=$743) as additional income.

TT generated 8889-S for my wife, but all the numbers there are zero; she is retired and has no HSA.

Other pertinent info: I retired Nov. 2024, and had single HDHP until that point. I had Medicare for Nov & Dec 2024. I turned 65yo on 9/9/2024.

Form 8889-T amounts:

Line 2 = $0.
Lines 3, 5, 6, and 8 are all = $4292. (Line 3 prorated from the $5150 amount, HDHP for 10 of 12 months)

Line 9 and 11 are both = $5035.

Line 12 = $0.
Line 13 = $0.
[Excess employer contributions TT worksheet above Line 13: A = $743; B= $743 (this amount in blue text, with a clickable detail popup); C = $0]
Line 14a, 14c, and 15 are all = $3086.
Line 16 =$0.
Lines 17 through 21 are blank.

I then clicked on the excess employer contributions TT worksheet above Line 13, item B, and itemized the 2025 expenditures, which totaled $765 (text now in red). This changed the item C to = $-22. Line 13 still =$0. Ran the error check, and it pinged that; so I changed line 13 worksheet item B to $743.

So I still see the disagreement between 8889-T line 16 (=$0) and Schedule 1 line 8f, which is still showing the $743.

Your continued assistance is most appreciated.

[BillM223]

Thank you for your patience, form 8889 processing is obtuse.

Listen, line 16 is for taxable HSA distributions, not contributions. You entered a 1099-SA, right? It had the amount of $3,086, right? It had the distribution code of '1', right? And because of the '1', TurboTax asked you how much of the distribution was used for qualified medical expenses (and you said all, right?).

So it is correct that line 16 (8889) is zero, because you had zero taxable distributions on the one 1099-SA that you entered. Since the 1099-SA for the excess contributions (which turns into a distribution if the contributions were through the employer) is usually received a year later (i.e., your 1099-SA with $743 in box 1, some unknown amount of earnings in box 2, and code '2' in box 3), should arrive in time for your 2025 return, in early 2026.

Now, I have made some assumptions on what you did; would you please confirm them for me? And does line 16 being zero now make sense?

[beach_bob_juno]

Form 8889 = obtuse... I deleted my opinion on it from my last post; your description is charitable.
😄

Quoting (**):

** You entered a 1099-SA, right? It had the amount of $3,086, right? It had the distribution code of '1', right? And because of the '1', TurboTax asked you how much of the distribution was used for qualified medical expenses (and you said all, right?).

All correct. Except that I have two 1099-SAs, because the employer switched HSA administrators in 2024 (insert eye roll). For the two 1099-SAs, the box 1 amounts total $3086, and are both coded 1. That entire amount was used for qualified medical expenses.

** So it is correct that line 16 (8889) is zero, because you had zero taxable distributions on the one 1099-SA that you entered. Since the 1099-SA for the excess contributions (which turns into a distribution if the contributions were through the employer) is usually received a year later (i.e., your 1099-SA with $743 in box 1, some unknown amount of earnings in box 2, and code '2' in box 3), should arrive in time for your 2025 return, in early 2026.

Understood.

** Now, I have made some assumptions on what you did; would you please confirm them for me? And does line 16 being zero now make sense?

Yes, confirmed as best as I understand. I do not have confusion over why 8889 line 16 is zero ... my confusion comes because the 8889 line 16 instruction says to take that amount (= 0), and include it on Schedule 1 Line 8f (along with any amount from 8889 Line 20, which on my form is blank). But when I look at Schedule 1 on TT, I am seeing the $743 amount. The TT Smart Worksheet above 8889 line 13 shows the excess contributions ($743, item A on that worksheet), and the excess withdrawn after the end of the year ($743, item B on that worksheet), to arrive at item C = zero on that worksheet, so Line 13 = zero.
8889 line 13 does not appear to have anything to do with lines 14 through 16. But that $743 amount is there on TT Schedule 1 line 8f. As it's the same value I am seeing in the Line 13 workup, I'm assuming somehow that line 13 is where Sch1 is finding the $743 that appears on line 8f.

The IRS instructions ^appear^ to allow me to spend down the HSA excess contributions prior to filing for 2024, and eliminate this showing up as additional income. If this interpretation is not correct, please let me know. But my main heartburn still resides with 8889 line 16 = $0, but the amount appearing on Sch1 line 8f = $743, and I still do not understand why. It ^looks like^ a TT software error, but it may be an IRS thing that's completely opaque per any documentation I have seen. 

[beach_bob_juno]

Paging BillM223... I am still looking for an answer.

[BillM223]

Please confirm my assumptions in my most recent post so that I can answer your question.

[beach_bob_juno]

ummm... I did that... Quote from my above comment:

[BillM comment] ** Now, I have made some assumptions on what you did; would you please confirm them for me? And does line 16 being zero now make sense?

[Beach_Bob comment] Yes, confirmed as best as I understand.