Form 889

[BillM223]

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?).

Are all these assumptions true?

I have just come to realize that the HSA Summary for the Online product is missing a line from the HSA Summary for the CD/download product. You have the CD/download version of the product, right? Or are you using the Online product but have paid for your return, so you can see your output forms?

[beach_bob_juno]

Yes, I confirmed all of that in above posts.
I have two 1099-SAs, because my employer switched HSA administrators in 2024. For the two 1099-SAs, the box 1 amounts total $3086, and they are both coded 1. That entire $3086 was used for qualified medical expenses.
I have used the step-by-step process for the HSA portion. I am not entering amounts directly into any forms.
I purchased the download version of TT from Amazon... Amazon did not offer a CD version of TT for tax year 2024. I have updated the app, as prompted whenever I launch the app.
 

[BillM223]

"For the two 1099-SAs, the box 1 amounts total $3086, and they are both coded 1. That entire $3086 was used for qualified medical expenses."

Apparently, both HSAs printed 1099-SAs for all the medical expenses, even though the expenses were probably shared between them. Very weird.

Listen, on your 8889, what is the amount on line 12A? It should be the gross excess contributions that should also appear one line 8f on Schedule 1 (1040). Give me the amounts of 12B and 12C while you are at it.

[beach_bob_juno]

Yes, changing the HSA bank was aggravating. There was an overlap when I could pay from the old HSA bank, but a couple months later the new HSA bank got the balance of funds from the old HSA, and I had a new HSA Visa card with the new bank so I could pay copays, deductibles etc.

Anyways, just to be specific, here's the two 1099-SAs:
HSA Bank: Box 1 distribution $54.74. Box 3, distribution code 1. Box 5 account type HSA.

HealthEquity: Box 1 distribution $3030.76. Box 3, distribution code 1. Box 5 account type HSA.
Total of the two = $3085.50 (rounds up to $3086).

On form 8889, there is a TT Smart Worksheet box between lines 12 and 13, titled Excess Employer Contributions. Amounts in that box are:
A = $743; B= $743; C = $0.

[BillM223]

So the $54.74 was what you spent on qualified medical expenses and the $3030.76 was what was transferred to the second HSA, or were both of these amounts for qualified medical expenses, one from first HSA custodian, and the other from the second HSA custodian? If these were ALL for qualified medical expenses, then just enter them as is (it does not matter that they were from two different HSAs). If the big one was reporting the transfer then go ahead and enter it, lest the IRS complain that they got a copy of a form that you didn't report. As I noted though, the first HSA custodian should not have sent you a 1099-SA for the transfer, if indeed that's what they did. Never mind, just enter it and declare victory.

Line 12 on your 8889 is as it should be. The line 12a amount is what should be on line 8f on Schedule 1 (1040). 

So I am still quite confused on why the $743 on line 2a (8889) is not on line 8f (Schedule 1, 1040).

I dug up this old question from you ("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. ")

TurboTax asks this question when you enter a 1099-SA, but you didn't have a 1099-SA for $743, so this question must have been asked in a different context. If you enter both of the 1099-S that you just listed, then do say that you spent everything on qualified medical expenses.

[beach_bob_juno]

>>  or were both of these amounts for qualified medical expenses, one from first HSA custodian, and the other from the second HSA custodian? 

The two amounts were from each of the HSA custodians. All of the amounts were spent on qualified medical expenses. *By definition of them being listed on a 1099-SA form*, these amounts are distributions from an HSA. Over the course of 2024, I paid qualified medical expenses from the first account (HSA), and at some point, I was able to pay for qualified medical expenses from the second account (HealthEquity). 

>> The line 12a amount is what should be on line 8f on Schedule 1 (1040). 

>> So I am still quite confused on why the $743 on line 12a (8889) is not on line 8f (Schedule 1, 1040).

The line 12a amount *is* on line 8f on Schedule 1. (= $743)
I have stated that in prior replies. I really feel like we are going in circles.

MY PROBLEM: 889 line 12B shows I have paid down (in 2025, prior to 4/15/2025) the $743 amount, to avoid this being a taxable amount for 2024. The IRS allows this, and TT says this as well (as I'm sure you know). What I do not understand, is why the $743 shows up in Schedule 1 line 8f, when I've already paid the $743 down. Because Sch1 8f takes the amounts from 8889 line 16 and 20...   not from the line 12 worksheet.

[beach_bob_juno]

Pinging BillM again… please have a look at my last comment. 

[BillM223]

Look, I still don't see why the amount on 12B would show up on line 8f (schedule 1, 1040), so there must be something else going on.

Would you send us a "sanitized" version of your return. "Sanitized" means that all personably identifiable data is removed so that we have no idea who you are.

You do not have to sanitize the return, because the process of creating a token (an entry into our data base that points to your sanitized return) invokes a process which removes all personally identifiable data.

To give us a token, please do the following:

Online

• Log into your TurboTax Online tax return
• On the left, click on Tax Tools
• Under Tax Tools, click on Tools
• In Tools Center, click on Share my File with Agent
• TurboTax will give you a “token”, a 7-digit number
• Post the token number in this thread
• Be sure to add to that post “@” “billm223” (without the space in between) so that I will be notified

Desktop (Windows)

• Open your return in the desktop product
• Look along the top and click on Online
• Click on Send Tax File to Agent
• TurboTax will give you a “token”, a 7-digit number
• Post the token number in this thread
• Be sure to add to that post “@” “billm223” (without the space in between) so that I will be notified

Desktop (Mac)

• Open your return in the desktop product
• Look along the top and click on Help
• Click on Send Tax File to Agent
• TurboTax will give you a “token”, a 7-digit number
• Post the token number in this thread
• Be sure to add to that post “@” “billm223” (without the space in between) so that I will be notified

[beach_bob_juno]

@BillM223 

Gotcha... the token no. is 166125193-72378958.

[BillM223]

Thank you for the token.

It is far easier to see the whole return than our back and forth. I will admit that because of the number of HSA questions I am doing the day - often at the same time - I can easily misread what you say.

Your return looks perfectly normal. 

You had excess employer contributions of $743. This is reported on line 12B (please ignore what I said in the previous post about 12B, I was still channeling 16, which has nothing to do with our issue).

This excess is NOT a distribution (yet). It was created the moment TurboTax detected the excess, and placed on line 8f of Schedule 1 (1040). This is why it is on line 12A.

On some previous pass, you told TurboTax that you would withdraw the entire $743. So now the $743 appears on line 12B, as it should. Just before you indicated that you would withdraw this amount, TurboTax reported that you had an excess, and would you withdraw it.

On subsequent passes, TurboTax does not report that you have an HSA excess, because it remembers that you said you were going to withdraw the $743.

This Amount - the amount of excess to withdraw - is a troublemaker because it is one of the primary candidates for a number that "sticks". For example, if you went through the HSA interview again and changed something (like the contributions), this does not change the stuck number, but you don't see the screen on which to change it. This is why I have people do the HSA RESET, because that clears out all numbers for the HSA, some of which you can't easily change any other way.

Oh, one more thing. I think you said up above some where that the withdrawn amount is not taxable. But it is taxable (this is why it's on line 8f), it's just not subject to a penalty, because you withdrew it in time.

OK, what have we left?