Spouse received 1099-SA form for 10 years old HSA account; now received HSA debit card in 2024 year and 1099-SA form from custodian,
box.3 "distribution code "1" - normal distribution"
box.5 = HSA checked
Turbotax premier version desktop:
Q1: when to enter this 1099-SA form? is it under "Wages & Income" tab, -or- "Deductions & Credits" tab, -or- "Other Tax Situations" tab
Q2: Is this taxable by any means? - does it impact taxpayer due/refund amount (causes increase/decrease)
E.g.: If tax payer currently have due of $50, after 1099-SA will this due increases even more with distribution code "1"
There's no W-2 entry for this distribution, because it's more than 10 year old, very old contribution; also no W-2 for spouse. Tax filing: MFJ filer
Q3: what is search "Jump to" feature/means in Turbotax?
Heard this is not a taxable item; true or false - please share some insights.
When first entered during "Wages & Income" tab, "Federal refund" box on top decreased, so deleted the entry to better understand. Pictorial guidance is appreciated. Thanks.
You enter the 1099-SA in the Deductions & Credits section- HSA, MSA Contributions.
It will ask "Did you use your Health Savings Account (HSA) to pay for anything in 2024? Choose Yes.
Enter the 1099-SA info.
It will ask "Did you spend your HSA money on medical expenses only?"- If you used the funds for medical expenses, it is not taxable. TurboTax will create the Form 8889 to file with your tax return.
Please let us know if you have any additional questions.
You enter the 1099-SA in the Deductions & Credits section- HSA, MSA Contributions.
It will ask "Did you use your Health Savings Account (HSA) to pay for anything in 2024? Choose Yes.
Enter the 1099-SA info.
It will ask "Did you spend your HSA money on medical expenses only?"- If you used the funds for medical expenses, it is not taxable. TurboTax will create the Form 8889 to file with your tax return.
Please let us know if you have any additional questions.
@SreenuPrabhaGMAl , Namaste ji
Having read and agreed with the res[ponse of my colleague @MaryK4 on how to correctly enter the details of 1099--SA and use TurboTax to file a correct return for this "HSA Distribution", I would just like add the following:
(a) A complete guide to HSA -- statute section 223 --> 26 U.S. Code § 223 - Health savings accounts | U.S. Code | US Law | LII / Legal Information Institute.
(b) summary position ---
1. Is it taxable income -- NO , if you use the distribution for defraying health related expenses; YES it is taxable to the extent that it is not used for health costs;
2. Is there any surcharge/penalty --- there is an age based penalty of 20% of unqualified use
3. This money was never taxed but has been expensed by your employer.
This is only for context -- please follow the instructions of @MaryK4 for recognizing this distribution from the trust.