HSA Form 5498-SA and W-2 Discrepancy: Different Excess Amounts and How TurboTax Handles It
I'm pulling my hair out over this HSA contribution mess I've got this tax season. For 2024, I had all my HSA contributions made through my employer - a combo of payroll deductions and employer contributions going straight from my company to the HSA provider. The 2024 IRS limit for HSA was $4,150, but here's where it gets confusing: - My W-2 box 12 code "W" shows $4,300.08 (which means I'm $150.08 over the limit) - BUT my HSA provider's website says my total contributions were $4,350.08, making me $200.08 over the limit To be safe, I already submitted the form to withdraw the $200.08 excess since I definitely don't want to break any rules here. Now TurboTax is giving me grief when I try to report this. On Form 8889-S, it's telling me "Line 12 Wks, line B should not be greater than the amount of excess employer contributions/excess HSA funding distributions." It seems to think I should only report $150.08 as excess. I'm completely confused - should I report $150.08 or $200.08 as my excess contribution withdrawal on Form 8889-S? I know whatever I take out counts as additional income (since it wasn't tax deductible), which is fine, but I need to get the right amount. I'm tempted to just report $150.08 withdrawn and then add the other $50 as "Other income" so at least I'm paying enough tax. Would rather pay a few extra bucks than deal with any IRS problems. For 2025, I'm thinking I'll just aim for around $4,000 in contributions to avoid this headache altogether. Any insights would be greatly appreciated!
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Rebecca Johnston
This is actually a pretty common issue with HSAs! The difference between your W-2 and the HSA provider's records is usually because of administrative fees that your employer pays directly to the HSA custodian. Here's what's likely happening: Your actual contributions were $4,300.08 (as shown on your W-2), but your HSA provider is counting those administrative fees (about $50) as additional contributions, bringing their total to $4,350.08. The correct excess amount to report is what's on your W-2 ($150.08) because that reflects your actual contributions. The IRS primarily uses your W-2 information to verify HSA contribution limits, not your HSA provider's records. Since you've already withdrawn $200.08, you should report the $150.08 as your excess contribution on Form 8889-S. The additional $50 you withdrew doesn't need to be reported as "Other income" - it's essentially just an early withdrawal of regular HSA funds.
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Nathan Dell
•But what if the extra $50 shown by the HSA provider IS actual contributions? My company switched HSA providers mid-year and sometimes the accounting gets messed up. Wouldn't reporting only $150.08 leave me vulnerable to an audit if the IRS sees the 5498-SA form from the HSA provider showing $200.08 over?
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Rebecca Johnston
•Good question. The 5498-SA form from your HSA provider does get sent to the IRS, but the W-2 is considered the authoritative document for employer contributions. If your company switched providers mid-year, that could definitely complicate things. In your specific case, to be absolutely safe, you could report the full $200.08 excess contribution on Form 8889-S. While you might pay a bit more in taxes than technically required, it eliminates any risk of discrepancy between your return and what the HSA provider reported to the IRS on Form 5498-SA.
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Maya Jackson
After struggling with a similar HSA reporting issue last year, I found an amazing tool that saved me hours of frustration. Check out https://taxr.ai - it actually analyzes your tax forms and explains discrepancies like this. I uploaded my W-2 and 5498-SA and it immediately explained why the numbers were different and gave me specific line-by-line instructions for Form 8889-S. The tool basically confirmed what you're seeing - that sometimes the HSA provider counts fees as contributions while your W-2 reflects only actual money going into the account. It even showed me exactly what I needed to enter in TurboTax to resolve the error messages.
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Tristan Carpenter
•Does it work with other tax situations too? I've got a mess with multiple 1099s and trying to figure out which expenses go where. And can you use it if you're already part way through filing with TurboTax?
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Amaya Watson
•I'm kinda skeptical. How does it actually figure out the discrepancy? Does it just tell you to go with the W-2 amount or does it actually explain WHERE that $50 difference came from? Because that's the real issue here.
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Maya Jackson
•It works with pretty much any tax form situation - 1099s, W-2s, K-1s, you name it. And yes, you can use it even if you're already in the middle of filing with TurboTax or any other software. You just upload the documents you're confused about, and it gives you specific guidance you can apply to whatever system you're using. For the HSA discrepancy specifically, it actually examines the detailed transaction history. In most cases, it identifies administrative fees or similar charges that get categorized differently between employers and HSA providers. It gives you a breakdown of exactly where that $50 came from in most situations.
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Amaya Watson
Holy crap I just tried that taxr.ai tool after seeing it mentioned here and it actually worked perfectly for my HSA issue! I had a similar problem but mine was even more complicated because I had contributions from two different employers last year. The tool analyzed both my W-2s and my 5498-SA form and showed me exactly where the discrepancy was coming from - turns out one employer was including some quarterly maintenance fees in their reported HSA contribution amount, which was causing all my confusion. It gave me step-by-step instructions for how to report it correctly on Form 8889-S, and when I entered everything exactly as it suggested, the TurboTax error messages finally went away. Definitely worth it for the peace of mind alone!
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Grant Vikers
If you're still having trouble figuring this out, another option is to actually call the IRS directly and ask. I know that sounds crazy because getting through to them is nearly impossible, but I used this service called https://claimyr.com and they actually got me through to a real IRS agent in under 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had a similar HSA reporting issue last year and was getting different answers from TurboTax support vs my HSA provider. The IRS agent I spoke with was surprisingly helpful and explained exactly how to handle the discrepancy between my W-2 and 5498-SA form. Saved me a ton of stress wondering if I was doing it right.
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Giovanni Martello
•How much does this service cost? Seems like it would be easier to just overpay a little tax than pay for a service to talk to the IRS.
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Savannah Weiner
•I've heard horror stories about calling the IRS. Even if you get through, are they actually giving correct information? I've read that their phone reps give wrong answers like 30% of the time.
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Grant Vikers
•I understand your concern about the cost, but when you consider the potential penalties for incorrect tax filing or the peace of mind from knowing you're doing it right, it's worth it. I can't discuss specific pricing here, but it was very reasonable considering the hours of hold time it saved me. Regarding the accuracy of information, I had the same concern! What I did was specifically ask for a tax specialist who handles HSA questions. They transferred me to someone who clearly knew the HSA rules inside and out. I also asked for the Internal Revenue Code section that applied to my situation so I could document where the guidance came from. The rep even emailed me the relevant IRS publication sections.
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Savannah Weiner
I was super skeptical about that Claimyr service when I saw it mentioned here, but I was desperate after spending HOURS on hold with the IRS trying to resolve my HSA contribution issue. I decided to give it a try, and I'm honestly shocked at how well it worked. Got connected to an IRS agent in about 12 minutes. The agent pulled up my account and confirmed that I should go with the W-2 amount for reporting purposes. She explained that the HSA provider was likely including account maintenance fees in their total, which don't count toward the contribution limit. She also told me that withdrawing the full $200.08 was fine, but I only needed to report the actual excess contribution ($150.08) on Form 8889-S. The extra $50 could just be treated as a regular HSA distribution. Totally solved my problem and the peace of mind was worth every penny!
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Levi Parker
Just wanted to add another perspective here. I'm a bookkeeper (not a CPA) but I've dealt with this exact issue for several clients. The discrepancy is almost always due to how the HSA provider treats administrative fees. Your best bet is to actually call your HSA provider directly and ask them for a detailed breakdown of that $4,350.08 amount. They can tell you exactly what makes up that figure and how much was actual contributions versus fees. You'd be surprised how helpful they can be in explaining these discrepancies. For what it's worth, I've always advised clients to go with the W-2 amount for reporting purposes, as that's what the IRS typically references during audits. But getting the detailed breakdown from your HSA provider gives you documentation to back up your position if questions ever arise.
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KingKongZilla
•That's a really good suggestion about calling the HSA provider directly. I hadn't thought of that! Did your clients ever have any issues with audits or questions from the IRS when following the W-2 amount instead of the HSA provider's higher number?
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Levi Parker
•None of my clients have ever had audit issues specifically related to HSA contribution discrepancies when they followed the W-2 amount. The IRS reconciles the information from multiple sources, but they understand these discrepancies are common. I do recommend keeping documentation from your HSA provider explaining the difference if they can provide it. In your case, if you call them and they confirm that $50 is administrative fees, ask them to email you that confirmation. It's good protection to have, even though it's rarely needed.
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Libby Hassan
Just to throw in another wrinkle - if you're over 55, don't forget about the catch-up contribution! The regular HSA limit for 2024 was $4,150 for individual coverage, but if you're 55 or older, you can contribute an extra $1,000, making your limit $5,150. Before stressing about excess contributions, make sure you're using the correct limit for your age.
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Hunter Hampton
•This is a super important point! My dad almost withdrew "excess" contributions last year until I pointed out he was eligible for the catch-up amount. Saved him a bunch of unnecessary taxes and paperwork!
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Emma Bianchi
This is exactly the kind of HSA nightmare that makes tax season so stressful! I went through something similar last year and here's what I learned: The key is to get documentation from both sources. Call your HSA provider and ask for a detailed breakdown of that $4,350.08 - specifically ask them to identify any administrative fees, investment fees, or other charges that might be included in their total. Most providers can give you a month-by-month breakdown that shows actual contributions versus fees. Since you've already withdrawn the $200.08, I'd recommend reporting the full amount as excess contribution on Form 8889-S rather than trying to split it. Yes, you might pay slightly more tax than absolutely necessary, but it ensures you're covered if the IRS cross-references your return with the 5498-SA form from your HSA provider. The peace of mind of knowing you're fully compliant is worth the few extra dollars in taxes. Plus, if you later get documentation from your HSA provider showing that $50 was fees (not contributions), you could potentially amend your return to get that money back. Your plan to aim for $4,000 in 2025 contributions is smart - building in that buffer eliminates these headaches entirely!
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Norah Quay
•This is really helpful advice! I'm dealing with a similar situation but mine involves a mid-year job change where I had HSA contributions from two different employers. The math gets even more confusing when you're trying to figure out which employer's contributions might include fees versus actual contributions. Your point about getting month-by-month breakdowns is spot on - I wish I had thought of that earlier. Would you recommend getting this documentation even if I'm planning to just report the higher amount to be safe? It seems like having the paperwork could be useful for future reference or if I ever need to justify the discrepancy. Also, do you know if there's a time limit on amending returns if you later discover you overpaid due to incorrectly reporting fees as contributions?
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