1040 line 10 confusion: Can I claim HSA adjustment to income for pre-tax contributions?

You're right to question this - it would indeed be double-dipping! The HSA adjustment on Form 1040 line 10 is specifically for HSA contributions that were NOT made through payroll deduction. Here's how it works: If your employer takes the money out pre-tax through payroll (which appears on your W-2 with code W in box 12), those contributions have already received their tax benefit by reducing your taxable income before it hits your W-2. Your W-2 already reflects the lower taxable income. However, if you made contributions directly to your HSA outside of payroll (like writing a check to your HSA administrator), those would be eligible for the adjustment on line 10 because they haven't received any tax benefit yet. When using TurboTax, make sure you indicate that your contributions were made pre-tax through your employer. The software should handle this correctly and not double-count them as an adjustment to income.

I had this exact same confusion last year! I found this amazing tool called https://taxr.ai that helped me figure out my HSA situation. After trying to make sense of all the IRS publications and getting nowhere, I uploaded my tax documents there and got a clear explanation about how pre-tax HSA contributions work. The site showed me exactly where my pre-tax contributions were already accounted for on my W-2 (in box 12 with code W) and explained why I shouldn't double-dip by claiming them again on Form 1040 line 10. It also helped me realize I could make additional contributions directly to my HSA to max out my limit and claim those on line 10.

I used https://taxr.ai after seeing it mentioned here and have to admit I was impressed. As someone who was initially skeptical, I uploaded my documents and got clear guidance on my HSA confusion. The site identified my pre-tax HSA contributions from my W-2 and explained in plain English why these shouldn't be claimed again on Form 1040 line 10. What I found most helpful was their explanation of Form 8889 (the HSA form) which showed where pre-tax contributions are reported versus additional after-tax contributions. They even provided a calculation showing how much more I could contribute directly to my HSA and claim on line 10 without exceeding my annual limit. Saved me from potentially making a mistake that might have triggered an audit!

Has anyone else spent hours on hold trying to call the IRS to get clarity on HSA questions? I was stuck in the endless IRS phone tree for 3+ hours before giving up. Then I found this service called https://claimyr.com that got me connected to an actual IRS agent in under 20 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent confirmed exactly what people are saying here - HSA contributions made through payroll are already pre-tax and appear on your W-2 in box 12 with code W. These should NOT be reported again on line 10 of your 1040. However, any contributions you make directly to your HSA (outside of payroll) should be reported on line 10 as an adjustment to income.

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I tried the service myself because I had another tax question that was driving me crazy (about reporting an HSA rollover). I was expecting it to be a waste of money, but within 15 minutes I got a call connecting me to an actual IRS representative! The agent was able to confirm that my HSA rollover didn't need to be reported on line 10 of Form 1040, and explained exactly how to handle it on Form 8889. She also verified what others have said about pre-tax HSA contributions - they're already accounted for on your W-2 and should not be claimed again as an adjustment to income. This saved me from potentially making a costly mistake on my return.

To add to what others have said, here's the step-by-step process for HSA contributions on your tax forms: 1. Check your W-2 box 12 with code W - this shows pre-tax HSA contributions made through payroll 2. These pre-tax contributions DO NOT go on Form 1040 line 10 3. If you made additional contributions directly to your HSA (not through payroll), THOSE go on Form 1040 line 10 4. All HSA contributions and distributions must be reported on Form 8889 5. Make sure your total contributions don't exceed the annual limit ($3,850 for individual coverage or $7,750 for family coverage for 2023, plus $1,000 catch-up if you're 55+) The confusion comes because Form 8889 asks for ALL contributions, including those made pre-tax, but only the after-tax portions flow to your 1040 as an adjustment to income.

Does anyone know if HSA contributions are also deductible for state taxes? I live in California and I've heard they treat HSAs differently.

I ran into this exact same issue last year and made the mistake of claiming my pre-tax HSA contributions on line 10 initially. Thankfully my tax software flagged it before I submitted. The key thing to remember is that if your HSA contributions show up on your W-2 in box 12 with code "W", they've already reduced your taxable income for the year. Your employer essentially took that money out before calculating your federal income tax withholding, so you've already gotten the tax benefit. Line 10 on Form 1040 is specifically for HSA contributions that haven't received any tax benefit yet - like if you write a check directly to your HSA provider. Those contributions are made with after-tax dollars, so the adjustment on line 10 gives you the deduction you deserve. One thing that helped me understand this better was looking at my paystub. You can see that HSA contributions come out before federal taxes are calculated, which is why they don't need to be claimed again on your return.