Is anyone having an issue with Health Savings Account (HSAs). It seems it doesn't give the option of reporting qualified medical expenses.

[fffreakx]

Form 8889 (HSAs) is done automatically by Turbotax so I filled one out myself and got a totally different figure.

[BillM223]

Did you receive a form 1099-SA? This is how qualified medical expenses are reported to you, and you enter this in TurboTax in the HSA interview.

What do you mean "you filled out a 8889 and got a totally different figure?" Because of the counter-intuitive terminology that the IRS uses for HSAs, it is highly unlikely that a non-tax professional is able to fill it out correctly by hand.

So tell us what lines were totally different on TurboTax's 8889 and your 8889 - line numbers and dollar amounts.

[fffreakx]

Greetings and thank you for the reply. We did input info from 1099SA.  Form 8889 part 2 (HSA distributions) line 15 is for qualified medical expenses. Pub 969, p 9 under insurance premiums number 2 states "Health care continuation coverage (such as coverage under COBRA. We paid $3208.00 (premium only) for 6 months and entered that on line 15. With a gross distribution of $5128., 0 rollover, and minus $3208. on line 15 equals $1920. 20% of that is $384 which we put on line 17b (form 8889). Thank you.

[RaifH]

What did TurboTax calculate differently? Was the Distribution Code 1 on Form 1099-SA?

To enter the information you have provided so far, you would enter Form 1099-SA as it appears. The following screen asks Did you spend your HSA money on medical expenses only? You would enter No, I didn't and then I spent part of it on medical expenses and enter $3,208. The remaining amount would be subject to the 20% penalty unless the HSA holder is over the age of 65, disabled, or passed away.