After adding my HSA contribution with after tax money, tax refund decreases

[seberlin]

My HSA contributions are made with after tax money.  When I enter the $7000 family HSA contribution, my tax refund decreases.  There is not an HSA contribution on either of our W2's, my employer does not contribute anything and we did not take any distributions.  All funds are on an after tax basis.  Shouldn't the contribution lower my taxable income and increase my refund?

I can't figure out what I'm doing wrong. Thanks for the help!

-SB

[Anonymous]

did you check off family coverage and that every month of 2019 the family was covered by a high deductible plan?    look at schedule 1 line 12 - if your input was correct this should show 7,000

[seberlin]

Yes, We had either individual or family coverage for the entire year.  When push the calculate button, it says we are eligible to contribute $7,000.

[KarenM90]

Yes, those refund numbers at the top of your TurboTax screen will change as you work through your return.

Are your contributions showing on your W?

HSA information needs to be entered into 2 sections of TurboTax.

First in Wages & Income as a W-2, 12 code W. (if applicable)

Then you will also enter it in the Deduction & Credits section under HSA, MSA Contributions. 

If you used all the requirements for an HSA, (you used any distributions exclusively for qualified medical expenses, and you have a High Deductible Health Plan ((HDHP) then your contributions should not be taxed. 

To jump to the HSA, MSA Contribution section take these steps:

1. Sign in to TurboTax Online
2. Click take me to my return  
3. Click Federal Taxes
4. Click Deductions & Credits 
5. Look for the Medical, HSA, MSA Contribution section and follow the on-screen instructions

Tax Tip:  If you took any distributions from your HSA then you will receive a 1099-SA. See the following TurboTax FAQ for more info.HSA Distributions

If you have gone completely through both of these sections, please go back through each and be read all the questions carefully to be sure nothing was missed.

[seberlin]

Karen,

I do not have any contributions on my on my W-2.  The contributions were not made through my employer's payroll deduction.  I made contributions directly to the HSA  with after tax money. I entered these contributions under the deductions and credits section.  I did not have any distributions for 2019.  

-SB

[KarenM90 · Accepted solution]

Please take a look at this TurboTax help article What is an HSA  Please note that you need to be in a HDHP, you can't be enrolled in Medicare or other health insurance policy, and you can't be a dependent on someone else's return.

Here are the instructions if you didn't make contributions through an employer and they aren't on your W2:

We'll ask about this uncommon situation when you step through the Medical section. Look for the questions Were HSA contributions made in 2019? or Do you need to make any adjustments to your HSA contribution amount? When you answer Yes, we'll open a screen where you can enter your contribution.

If you have already gone through this section entirely, as indicated above I recommend that you delete the HSA forms from your return and start the section over again according to the instructions above.

To delete this form, go to Tax Tools/Tools/Delete a Form from the menu in black on the left.  Delete form 8889 and any related worksheets.

[Critter]

Reducing your AGI may affect the return in other places like credits ... review the return before and after making that entry to see what it affected. 

[seberlin · Accepted solution]

Karen, 

Thanks for the suggestion and explanation of how to delete the HSA forms.  I deleted the HSA form then filled everything out again.  After completion, I received the credit I was expecting. Not sure what caused the error before.   Thanks again for your help!

-SB