How to fix torbotax calculation error

[rajunallappa-msn]

In form 8889 for HSA,   Line 13 says -"Enter the smaller of line 2 or line 12. Turbo tax entered the higher value. This messes my taxes. How can this be fixed?

[BillM223 · Accepted solution]

This is not an error, but is a shortcoming in the IRS' design of the form, in that it does not have a way to represent the following situation.

If you reported a carryover of excess HSA contributions from the previous year (in the question, "Did you 'overfund' your HSA last year?"), then this amount is carried forward to the current year as a "personal contribution", to try to deduct it in the current year (it was not deducted in the previous year).

The amount of personal contributions should go on line 2 of the 8889. However, line 2 is normally for current year personal contributions, and you may have had none. Prior year personal contributions (i.e. the carryover) don't print on line 2, even though they are part of the calculation.

Thus we have the apparently illogical situation of TurboTax picking line 12 as the smaller amount when line 2 is probably blank. If you compare your carryover amount to line 12, I think that you will find line 12 to be the smaller amount.

This oddity will not affect your return.

[rajunallappa-msn]

Thanks for your quick response. What you say makes perfect sense but I wish they present it in a way its easy to understand on the screen. 

Thanks again

[Tricia5]

How do i get this fixed in the program.  I believe it downloaded from my W2 and i also entered.  i tried to re-do it several times with no luck.  so frustrating.  please help

[DawnC]

You should go back and remove the hsa contributions that you entered.   TurboTax does pull your contributions from Box 12, code W, so you should not re-enter them.   Otherwise, you may get an over-contribution message.   To fix it, go back through the HSA questions and remove the personal contributions you entered earlier.  

1. Open your return and select Search
2. Search for hsa and select the Jump to hsa
3. Answer the questions until you get to the Did you put money into an HSA in 2022 screen, answer YES
4. Make sure you didn't accidentally re-enter the amount already listed (from box 12 of your W-2) as this will incorrectly double your total contribution amount.  If you entered them again, remove your entry.  Most taxpayers will leave the 2nd box blank as it is rare to contribute to an HSA outside of your W-2 contributions.
5. Continue through the HSA screens, making sure you answered all questions correctly
   1. If you overfunded your HSA last year but withdrew the excess by the due date of your 2021 return, answer No to Did you overfund your HSA in 2021?

If the error is something other than an over-contribution message, reply back and let us know.  @Tricia5