health savings accont

[hopkins1963]

I have an allotment to an account that was not properly set up as an HSA. Moreover, I did not have an HDHP anyway. SO, I have the allotment on my W2 and not sure how to handle it in the software.  My attempts thus far have yielded a tax benefit for which I'm not qualified.  I believe I should pay taxes on the full amount because the medical expenses are not high enough to itemize, ie the standard deduction is better.  Need assistance with working through this, please.

[JulieS]

Yes, if you W-2 shows an amount in box 12 with code W, and you don't have an Health Savings Account (HSA), or a high deductible health plan (HDHP), the amount should be taxable, and you wouldn't get an HSA deduction. 

First, go ahead and check if the income or HSA deduction are showing on your return now. Your account says you are using TurboTax Desktop Home & Business. If that's not right, you navigation will be different. 

Here's how to look at that in H&B Desktop:

1. Open your TurboTax software and your return. 
2. Select Forms in the upper right corner. 
3. Highlight Schedule 1 in the list on the left. 
4. Check Schedule 1, line 8f, income from Form 8889. This should show the amount from your W-2, line 12, code W. You should also have no HSA deduction on line 13.
5. If that's not what you see, select Step-by-Step in the upper right corner.
6. Select the Personal tab, then Dedudtcions & Credits.
7. Select Start or Update to the right of 1099-SA, HSA, MSA, which is under Medical.
8. Select None of the above, then Continue.
9. Select None on the second page, then Continue.
10. Now, check the return again. Select Forms in the upper right corner.
11. Highlight Schedule 1 in the list on the left.
12. Check Schedule 1, line 8f, income from Form 8889. This should show the amount from your W-2, line 12, code W. You should also have no HSA deduction on line 13.

If this doesn't resolve the problem, or my assumption is wrong, reply back and Turbotax can help you more.