Turbo Tax shows tax owed before entering 2024 information

[EllieWS]

I just installed Turbo Tax 2024 desk top version, and I transferred my Turbo Tax 2023 data. As soon as I completed the transfer, it showed that we owed $78 tax. I didn't even enter any income information for 2024. Normally, before I enter our income information, it should show 0. I thought there was an error, so I deleted it and re-transferred Turbo Tax 2023. But the same thing still occurred.

 I looked at the forms to see where that came from. On the 1040 Form, Line 8 additional income, it showed $780. I am not sure where that number came from. It didn't match the numbers on our 2023 tax return, either. 

How should I correct this?

[baldietax]

I get similiar, different amount, line 8 gets wiped out by the deduction but there is a penalty tax in line 32.  Seems to be coming from HSA it's carried forward 2023 contribution and coverage info into some worksheet and thinks I have some penalty from it.  Hopefully will sort itself out once I get to that section.

[BillM223]

If you have a carryover of excess HSA deduction from 2023, then before you even enter anything for 2024, this will appear to be income in 2024.

Why?

Because an HSA carryover from 2023 is used as a personal contribution to your HSA in 2024, but until you go through the HSA interview to show your HDHP coverage, this amount will appear to be excess HSA contributions for 2024, thus added to additional Income.

So the point of this is not to worry about starting out with tax due - just go through your tax return, and check the results at the end. If you properly dealt with the excess HSA contribution in 2024, then it will go away.

[baldietax]

Oh I see, guess it won't sort itself out, because I am just now finding out I had an excess contribution in 2023.  I did have 1 month without HDHP and for whatever reason thought that was ok rather than 11/12 of the limit, and TT2023 didn't show a lower contribution limit, the worksheet in Form 8889 in TT2023 didn't zero that month out?  Now TT2024 Form 8889 for 2023 is showing the excess...

And I fully contributed for 2024 so I guess I have to withdraw that excess before April 15th so 2024 is whole but stuck with some penalty for 2023?

TT2024TT2023

[baldietax]

oh hold on I think it's ok - 'last month rule' to the rescue? ... I had coverage full year 2024 and when I filled this in the issue with 2023 went away.  Back to $0 on the tracker.

[EllieWS]

@BillM223 

I am not sure what happened. I just went into my Turbo Tax 2023 file to see what I did with our HSA. I lost my job in the middle of 2023, so I only contributed $780. Because of this, my husband increased his part to $6970 to make to our family max as $7750. I checked the answers to Turbo Tax 2023 to see if I did correctly, but I couldn't see any mistake there. There shouldn't be any excess contribution issue. The $780 income on Turbo Tax 2024 was likely from my part of contribution in 2023, but we didn't over contribute, so I am still very confused.

I am going to keep working on my tax return for 2024 to see how things go. Maybe it will go away once I enter all the numbers is...

[EllieWS]

@baldietax 

That's very interesting!

We were covered every month, so that wasn't the issue. But I am going to fill in all the numbers to see how things go.

Thank you for sharing your experience!