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[LiDiPi]

(Going to H&R Block)

[Opus 17 · Accepted solution]

A medical FSA is not reported on your W-2 or your tax return at all.  The amount should have been subtracted from your box 1 taxable wages before the W-2 was printed.  Then, any medical expenses that were reimbursed from the FSA should not be included as deductible medical expenses since they were already reimbursed with tax-free money.  

A dependent care FSA should be reported in box 10.  That will trigger Turbotax to ask questions about your qualifying dependents, information about the care provider, and the amount of care.  If your dependent care FSA is not included in your W-2 in box 10, you need to get a corrected W-2 from your employer. 

[LiDiPi · Accepted solution]

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[BillM223]

Opus pointed out that there are two different types of FSAs which are treated differently. Please tell us if you have a health care FSA (for paying medical bills) or a dependent care FSA (for paying dependent care bills). Until you tell us which one you had, we can't be sure of your issue.

Based on what you have said so far, it sounds to me that you have a dependent care FSA. As Opus asked, do you have a dollar amount in box 10 on your W-2? (My guess is yes). When there is an amount here, you have to complete form 2441 to show that this amount (or part thereof) was covered by documented spending on dependent care. Did you go to the Child and Dependent Care interview, and what questions and answers did you make there?

If you had an entry in box 10 on your W-2 and did not correctly complete the Child and Dependent Care section, this would cause the amount in box 10 on the W-2 to be added to your income, as Opus said at the end of this post.

[LiDiPi · Accepted solution]

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[Opus 17 · Accepted solution]

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@LiDiPi wrote:

It is showing that I OWE over $700 in taxes. That isn't correct. If you do it by hand, they are using my total income to figure out what I owe. NOT my taxable income. I need a way to fix this problem. I'm MFJ and only I have an FSA, not my spouse. I currently cannot file because of this problem. I'm not paying money that I don't owe. Is there a way to report the REASON for the taxable income difference so that the program does what it is supposed to?

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You might just owe tax because you did not have enough withholding.

There are no problems with Turbotax handling medical FSAs.  The amount should already be removed from your box 1 W-2 wages.  If you think your wages are reported incorrectly, you need to contact your employer and get an explanation or a corrected W-2.

(For example, suppose your gross salary is $1000/week, or $52,000 per year.  You pay $100/ month in pre-tax medical insurance premiums ($1200/year).  You contribute $100/month to a 401k ($1200/year).  And you have a $2600 medical FSA.  Your box 1 wages should only be reported as $47,000, because the pre-tax items should be subtracted from your wages.)

If your W-2 is wrong you have to talk to your employer, not Turbotax.