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Hi, TurboTax expert:
For whatever reason, I ordered both TurboTax 2023 Primer and HR Block Tax for tax year 2023.
So it is the first time I tried to input my tax on both software and compare them side by side.
So far, I just input 2 W2s (one for myself, and one for DW), and to my surprise, both software gave me different Fed tax due amounts, and they are about thousands of dollars difference.
So if my life is simple just with 2 W2s, which one I should trust?
First, my W2 are imported on both ends from ADP automatically, and I have to manually import my wife's.
I have to double-check to make sure there is no manual input error.
After I carefully checked the generated forms on both ends, I found out the difference.
On my W2, under box 12c, there are $7750 amount, I believe it is due to our HSA contribution for 2023 year.
Under Turbotax, this is added in schedule 1f (Income from form 8889), then added into 1040 form line 8,
while under HR Block, schedule 1f is 0, then form 1040 line 8 is 0 too, so makes the total income with $7500 difference, therefor the tax due amount is quite different.
So based on my understanding of HSA, I think HRBlock does it correctly, right?
Why does Turbotax in this case count that $7500 as additional income on 1040 form line 8?
In TurboTax, it did ask question related to HSA contribution after importing my W2. Did I give wrong answer? If so, how should I correct that?
Thanks
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The truth is that the TurboTax software and the H & R Block software are written differently and you cannot compare the two outcomes until the entire tax return is complete.
The TurboTax software adds your Health Savings Account (HSA) contributions to your income until you have verified in another section that you were indeed eligible to make those contributions. The H & R Block software is seemingly making the assumption that you are eligible and would presumably add the contributions to income if it was later determined you were ineligible.
The following information will explain how TurboTax handles the HSA contribution information Entering information into your return regarding HSA contributions is a two-step process. Each step is likely to cause the refund/balance due number to change because TurboTax constantly updates the calculations as you go through the return.
The first step occurs when you enter your W-2 which includes contributions to the HSA. After entering the information from your W-2, the amounts contributed to the HSA are included in your income (thus causing a higher balance due or lower refund).
Then, the second step is to verify your eligibility to contribute to the HSA due to coverage under a High Deductible Health Plan. This results in the HSA contribution being removed from your income since you were eligible to make the contributions. Therefore the balance due amount will drop or the refund amount will increase.
To go directly to the section of your return to verify your eligibility, use these steps:
Until you complete the HSA section to establish eligibility to make the HSA contribution, TurboTax treats the HSA contribution as an excess contribution.
The truth is that the TurboTax software and the H & R Block software are written differently and you cannot compare the two outcomes until the entire tax return is complete.
The TurboTax software adds your Health Savings Account (HSA) contributions to your income until you have verified in another section that you were indeed eligible to make those contributions. The H & R Block software is seemingly making the assumption that you are eligible and would presumably add the contributions to income if it was later determined you were ineligible.
The following information will explain how TurboTax handles the HSA contribution information Entering information into your return regarding HSA contributions is a two-step process. Each step is likely to cause the refund/balance due number to change because TurboTax constantly updates the calculations as you go through the return.
The first step occurs when you enter your W-2 which includes contributions to the HSA. After entering the information from your W-2, the amounts contributed to the HSA are included in your income (thus causing a higher balance due or lower refund).
Then, the second step is to verify your eligibility to contribute to the HSA due to coverage under a High Deductible Health Plan. This results in the HSA contribution being removed from your income since you were eligible to make the contributions. Therefore the balance due amount will drop or the refund amount will increase.
To go directly to the section of your return to verify your eligibility, use these steps:
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