Federal Tax Due After Transferring 2022 tax return into Desktop 2023

[Hockey7]

When I transferred my 2022 return into my 2023 return it immediately showed a federal tax due. I am not sure why. Did this happen to anyone else?

[JulieS]

Yes, that can happen if you have an income item that is spread over a number of years, but it isn't common.

For example, if you took a Qualified Disaster distribution in the last few years and opted to spread it over three years, that may be the cause. 

If you haven't‌ started your return, open it and select Forms in the upper right corner. Select Form 1040 in the list on the left.  Check which lines have numbers on them. 

If it's not clear what caused the balance due, post again with details about which lines have income and TurboTax can help you out. 

[Hockey7]

Thank you for your quick response. I followed your guidance. I found the line on Form 1040 that had a number on it.

Line 23 other taxes, including SE tax, from Schedule 2, line 21.  $24

I then went to Schedule 2 line 21 additional tax on IRA’s or other tax-favored accounts. Attach form 5329 if required. 

I then went to my 2022 return. 

Form 5329. Part VII Additional Tax 6% for excess contributions to HSA’s. I was over $400 allowed in my HSA contribution because I made the mistake of not adding what my employer was going to contribute to my total for the year contribution. (I have since been very careful to not make the same error again.) 6% of 400 is 24. The numbers therefore make sense. I paid this $24 on my 2022 taxes. I see it on my return.

My question now is if I already paid this in 2022, do I have to pay it again in 2023 or is Turbo Tax assuming/anticipating  I am going over again in my HSA contribution?

Thank you!

[AmyC · Accepted solution]

The program will continue on the path started since people don't always fix the situation,

If you have removed or compensated for the overcontribution, you  will need to correct the program and let it know that you no longer have an overcontribution to your HSA.

If you did not withdraw the money or reduce contributions to compensate, you still must continue to pay the penalty until you correct the situation.

See  Publication 969 (2022), Health Savings Accounts

[Hockey7]

Thank you very much for your help. One last question...when you say you must "correct the program and let it know you no longer have an overcontribution to your HSA" is the program you are referring to Turbo Tax?

If not, what do you mean by program? My HSA program?

Thank you again! Your time is much appreciated.

[JohnB5677]

If you did not remove the over contribution in 2022 it will carry over to 2023, and again to 2024.

Correcting it in the program will require one of these salutations to be completed.

You can correct this in two ways:

• The first is to remove the excess funds before the tax deadline in the same year they were made. 
  • It seems too late for this one.
• The second is to apply your excess contributions towards next year's annual contribution.

Please see Publication 969 referring to: Excess Contributions