Deluxe supports the Form 8889 that HSA contributions/distributions.
So if I do not upgrade, then I simply cannot get a tax break from the HSA contributions? How do I know what the tax break would amount to?
If you have contributions on your W-2 or receive a 1099-SA then you have to complete Form 8889. Roughly speaking, deductions are worth whatever your tax rate is multiplied by the contribution amount.
As stated earlier, the Deluxe version of TurboTax supports Form
8889 which is required to be filed
when you make contributions to a Health Savings Account (HSA). It is in your best interest that you upgrade to Deluxe in order to file your return properly.
If your HSA contributions were made through payroll deductions and are reported on your W-2 in Box 12 with Code W, then you have already received the tax benefit of the contribution because the money placed in the HSA was pre-tax money. If you made separate contributions outside of payroll deductions, then the contributions will be a deduction on your tax return.
No matter how the contributions were made to the HSA, you are required to file Form 8889 and to go through the section of your return to confirm that you were eligible to make the contributions. If you do not do so, you can expect to be contacted by the IRS for not filing Form 8889.
TurboTax Deluxe, Premier and Self-Employed will process IRS form 8889 Health Savings Account.
Free Edition and Basic will not.
See this comparison of TurboTax products. Scroll down the left side until you see Form 8889.
That is some sneaky s*** they're trying to pull. I've been using TurboTax for seven years but I might find an alternative myself now.
It really is sneaky. They are trying to force people into upgrading. Almost everyone I know has bad healthcare options (a high-deductible health plan) and has an HSA.
I’m pretty sure Credit Karma doesn’t do this to file.
Were you able to find an alternative tax solution that does not pull this kind of scam?
This is not a scam. Free Edition is free only for simple returns that file a 1040 with no additional schedules, and is free as long as you don't select any add-ons or upgrades. Click here: FREE
To file a Form 8889, you would need to upgrade to Deluxe edition.
If you are looking for a complete free filing, you might want to consider another option. It's called the TaxFreedom which is an IRS Free File Program delivered by TurboTax. It is exclusively available online and has its own dedicated website at taxfreedom.com.
@TusharK92
It very much is a slimy ordeal/scam you are trying to pull!
I have filed taxes using TurboTax Free online for the past 2 years. Nothing has changed with my employment in the past two years! All the details and everything is exactly the same!
And now suddenly this year, TurboTax is trying to force me to pay 110$ (60$ federal and 50$ state) saying "It seems you have an HSA and this is not covered in Free File". This was not the case for the past two years!
I have 0 individual HSA contributions on my end. And the contribution by my employer is already listed in my W2 in box 12. You guys have introduced this new catch to try and force people to upgrade.
You purposely have introduced it at the end of the process, wasting my time! After going through the entire process, when it comes to the step of filing, you introduce your scam by saying your case is not include in Free File, please upgrade to deluxe.
Looks like I am going to be looking for alternate platforms. Thanks!
I'm also befuddled by how Intuit is handling this. Looked at TaxACT and they are pulling an even worse scam. Off to Free Tax USA where my filing with an HSA does not cost an additional $60. Thanks Turbo Tax for wasting 2 hours of my day. This should be disclosed in the beginning when the W-2 is entered into the software, not sure why you allow a customer to continue to think that they can file for free throughout the entire tax preparation and filing process only to say gotcha at the end and extort the user for $60 to file their taxes which they are required to do.
If Free Tax USA starts charging me then it's back to the old paper filing days and enough of these digital paywalls that are so sleazy with letting you think everything is done only to demand payment at the very end. Anyone that doesn't think this is extortion better break out a dictionary and take a look.
Intuit you lost a customer for life, never coming back. Yeah Free Tax USA is essentially Intuit but with the government as a buffer so that people can file their taxes without these absurd paywalls.
What an awful company treating people like these to extort them for a few dollars on their return, hey you're getting a tax refund, but first you gotta pay me $60 and then you can submit your taxes to get your refund. What a joke.
You took the words out of my mouth. I would've considered paying for the upgrade had I known that I'd be charged at the beginning, but I'm not interested in a bait and switch game after wasting my entire morning on this. Not only is there a significant fee to upgrade, but there is a $39 "processing fee" on top of that to have it withdrawn from my return, also not advertised at the beginning of this process. That was the final straw that solidified my decision to start from scratch elsewhere.
Off to find a new program, or perhaps even hire an accountant, but certainly won't be using Turbo Tax ever again. I'll be sure to spread the word to all of my colleagues and friends with HSA accounts before they waste their time as I did.
Thank you for the suggestion! I will use FreeTaxUSA for my returns this year.
I also find it slimey that because I've made contributions to my HSA, suddenly it's a deluxe-tax type situation. From what I understand, HSA contributions are common for most people with a high deductible plan, so a BASIC service should also include this.
It is pretty scummy of this company to not clarify that you will need to upgrade based on having an HSA. What I noticed is that they wanted to charge me over $100 for state and federal. I went back and reviewed everything, and when I got back to filing, the upgrade price changed to $68. Is this a glitch? Scam to get people to just submit it to get it over with? It’s clearly intentional to throw this all at the end of filing because most people are just trying to get it out of the way. Disgusting tactics by this company for sure.
Goodbye TurboTax, scumbags trying to force us to upgrade for over $100, taking me all the way to the end of the process, only to say "Whoops, give us $100+ to file first".
So I have been receiving this message saying to upgrade TurboTax since I had a Health Savings Account in 2024. Although i had the health savings account, I didn't even use it at all. I was told that I didn't even have an excess contribution since the health savings account had been open and unused for 6 months. I have so many questions! How can I delete this upgrade message to go back to free filing if I didn't even use the HSA account? I haven't been able to complete my taxes because of this upgrade notification! Am I required to complete the 8889 form I saw in posts above this forum? if so, what is the 8889 form about, what information is needed? Thank you in advance to those who reply back to this post!
TurboTax requires the upgrade because you qualify for the Retirement Savings and Contribution (Saver's) Credit. You can qualify for the credit if you made contributions to a retirement plan, including an HSA account. You probably have contributions to a 401K or HSA on your W-2. Having the HSA account does not require an upgrade, but the credit does.
You qualify for the Saver's credit if you’re:
Depending on what your tax situation was last year, you might need to use new tax forms to claim the same deductions, credits, or forms of income. Some of the situations that are now in TurboTax Deluxe include:
Get more information on which forms are included in TurboTax Free Edition. @whimpyreader
You can delete Form 8880 from your return, but if you qualify for the credit, it will re-generate.
How to delete forms in TurboTax Online
How to delete forms in TurboTax Desktop
How to downgrade to a different TurboTax Online product.