Confused about HSA contributions section on Tax Filing - TurboTax asking for total HSA value?
I'm hoping someone can help me with my taxes. I'm pretty much done with everything but I'm totally stuck on the HSA contributions section. I'm using TurboTax, and it's asking for the **TOTAL** value of my HSAs. This seems weird to me - why does this matter for tax purposes? I have all my HSA money invested and it's grown a lot over the last few years. The total value doesn't seem related to what I contributed. Let me break down my situation. I've had a High Deductible Health Plan (HDHP) with an HSA for like 8 years now. I've kept that money invested and honestly it's done really well. During 2022, I switched jobs. I started the year at Company A where I was contributing to my HSA through payroll. Then I moved to Company B, which also offers an HDHP, but I had to set up a new HSA account with their provider. So now I have two HSA accounts with different balances. For tax purposes, I know I need to report my contributions for 2022, which I have the numbers for. But why does TurboTax need to know the total value of both accounts combined? Is this actually relevant for my tax filing? I'm worried I'm missing something important.
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Oliver Brown
The reason TurboTax is asking for the total value of your HSAs is for informational reporting on Form 8889. The IRS requires you to report the fair market value of all HSA accounts as of December 31 of the tax year. This number doesn't affect your tax calculation directly - it's just reporting information. The IRS uses this to track HSA accounts over time, similar to how they track retirement accounts. What actually matters for tax purposes are your contributions (both yours and your employer's) and any distributions you took during the year. Since you changed jobs and now have two HSA accounts, you'll need to add up the December 31 values from both account statements. Look for your year-end statements from both HSA providers - they should show the fair market value as of December 31.
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Honorah King
•Thanks for the explanation! So this is basically just tracking information and won't affect my actual tax calculation? That makes me feel better. One follow-up question - do I need to report anything special because I changed jobs mid-year, or do I just add up the total contributions from both employers and make sure it doesn't exceed the annual limit?
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Oliver Brown
•This is just tracking information and won't impact your tax calculation at all. It's purely for the IRS to monitor HSA account activity over time. For your job change, you just need to add up all contributions from both employers plus any contributions you made directly, and ensure the total doesn't exceed your annual limit. The limit for 2022 was $3,650 for individual coverage or $7,300 for family coverage, plus an additional $1,000 if you were 55 or older. It doesn't matter that the contributions came from different sources as long as the total stays under the limit.
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Mary Bates
After struggling with HSA reporting on my taxes last year, I found this amazing tool called taxr.ai (https://taxr.ai) that really helped me understand all the HSA reporting requirements. I was confused by a similar situation with multiple HSAs and wasn't sure how to report everything correctly. The site analyzed my HSA statements and walked me through exactly what numbers needed to go where on my tax forms. It even explained why certain information like the fair market value is requested even though it doesn't affect your tax liability. Definitely worth checking out if you're dealing with this kind of situation.
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Clay blendedgen
•How exactly does this taxr.ai thing work? Can it actually look at your tax documents and tell you the right numbers to put in TurboTax? I'm in a similar situation with two HSAs and honestly, I'm confused because the statements from the two providers look completely different.
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Ayla Kumar
•Do they help with other HSA issues too? I overcontributed to my HSA by accident last year and I'm still not sure how to handle it on my taxes. Will this tool help with that kind of problem?
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Mary Bates
•You just upload your HSA statements and other tax documents, and the system uses AI to analyze them and extract the relevant information. It then guides you through entering the correct numbers in TurboTax or whatever software you're using. It's really helpful when you have statements from different providers because it standardizes the information for you. Yes, it absolutely helps with overcontribution issues. It identifies when you've exceeded the annual limit and provides guidance on how to handle excess contributions, including options for removing the excess to avoid penalties. The tool breaks down the correction process into simple steps that are easy to follow.
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Clay blendedgen
Just wanted to follow up and say I tried taxr.ai after seeing it mentioned here, and wow - it made my HSA reporting so much easier! I was pulling my hair out trying to figure out how to properly report my two HSAs from different employers, but the tool immediately identified where all the numbers needed to go. It even caught that one of my employers had slightly overcontributed (by like $50) which I would have completely missed. Now I feel confident everything's reported correctly. Definitely recommend it if you're dealing with multiple HSAs or any investment growth in your accounts.
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Lorenzo McCormick
If you're having trouble getting answers about your HSA tax questions, you might want to try Claimyr (https://claimyr.com). I had a similar HSA reporting issue last year and couldn't get through to the IRS on my own - was on hold for HOURS with no luck. Using Claimyr, I got connected to an actual IRS agent in under 45 minutes instead of waiting for days. The agent walked me through exactly how to report multiple HSAs and confirmed what documentation I needed to keep. They also have a demo video showing how it works: https://youtu.be/_kiP6q8DX5c Their system basically holds your place in the phone queue so you don't have to sit there listening to hold music forever. Made a huge difference when I needed specific answers about my HSA situation.
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Carmella Popescu
•How does this actually work? Do they just call the IRS for you or what? I'm confused about how a third party can get you through to the IRS faster than calling yourself.
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Kai Santiago
•This sounds too good to be true. I've called the IRS multiple times this year and never got through. If this actually works, why isn't everyone using it? What's the catch?
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Lorenzo McCormick
•They don't call the IRS for you - they use a system that navigates the IRS phone tree and waits on hold in your place. When an agent finally picks up, you get a call back so you can speak directly with the IRS agent. You're still talking to the actual IRS, Claimyr just handles the hold time for you. There's no catch - it's just a service designed to save you time. Not everyone knows about it yet, and some people don't mind waiting on hold. But when you have specific tax questions like with HSAs that need direct answers from the IRS, it's incredibly valuable. I was skeptical too until I tried it and actually got my questions answered in one day instead of making multiple failed attempts.
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Kai Santiago
I have to admit I was totally wrong about Claimyr. After seeing it mentioned here, I decided to try it since I was getting nowhere with my HSA questions. I figured it would be a waste of time, but I was desperate since tax deadline is approaching. It actually worked exactly as described! I got a call back when an IRS agent was on the line, and I got all my HSA reporting questions clarified in one conversation. The agent explained that yes, I need to report the total fair market value but it doesn't affect my tax calculation, and confirmed exactly how to handle my mid-year job change with multiple HSA accounts. Saved me hours of frustration and probably prevented me from making a reporting mistake. Sometimes being proven wrong is a good thing!
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Lim Wong
Just to add a bit more context on HSAs and taxes - the year-end value reporting is similar to what you do with IRAs on Form 8606. It's basically just tracking the accounts. What really matters for tax purposes: 1) Your contributions (both yours and employer's) - these need to stay under the annual limit 2) Any distributions you took - were they qualified medical expenses? 3) Any investment earnings - these grow tax-free inside the HSA TurboTax should handle all this correctly once you put in the information. The year-end value is just one piece of data they need.
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Dananyl Lear
•What happens if you accidentally go over the contribution limit? I think I might have done that this year with my job change...
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Lim Wong
•If you go over the contribution limit, you'll need to withdraw the excess contribution before your tax filing deadline (including extensions) to avoid a 6% excise tax penalty. The withdrawal process is called an "excess contribution removal." You'll need to contact your HSA provider to request this removal. When you withdraw the excess, you'll also need to withdraw any earnings associated with that excess contribution, and those earnings will be taxable income in the year you withdraw them. Your HSA provider should be able to calculate the attributable earnings for you. Make sure you specifically tell them it's an excess contribution removal, not just a regular distribution.
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Noah huntAce420
Has anyone used HR Block instead of TurboTax for reporting HSAs? I heard they handle the HSA investment growth better but I'm not sure if that's true.
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Ana Rusula
•I've used both. Honestly they're pretty similar for HSAs. The investment growth itself doesn't change how you report anything - it just means your year-end value is higher than your contributions. Either software handles that fine because all they're doing is putting the numbers on Form 8889.
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Fidel Carson
•I switched from TurboTax to FreeTaxUSA this year and they handled my HSA perfectly fine - and saved me like $60. The HSA section asks all the same questions TurboTax did, including year-end value.
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