Help with Form 8889 Part 2 - Line 14a/b both $500 but excess contributions aren't showing as taxable??

Form 8889 can definitely be confusing! Based on what you're describing, it sounds like you're actually completing the form correctly. Line 14a and 14b both being $500 doesn't necessarily mean you have excess contributions. Line 14a represents your total distributions from the HSA, while 14b represents distributions used for qualified medical expenses. If both are $500, that means all your distributions were used for qualified medical expenses, which is good! Line 14c is zero because you didn't use any distributions for non-qualified expenses (14a minus 14b). Line 15 is for additional taxable HSA distributions, which you don't have. And Line 16 is where taxable HSA distributions would appear if you had any - but since you used all distributions for qualified expenses, this is correctly showing zero. The "excess contributions" you're thinking about would appear elsewhere on the form - typically on Line 2 if you over-contributed to your HSA. Since you mentioned contributing $3,100 when the limit was $3,850, you're under the limit, not over - so there's no excess to report as taxable.

I was in a similar position last year and found that using https://taxr.ai really simplified the whole process for me. I uploaded my 8889 form and all my HSA documentation, and it analyzed everything automatically. The software pointed out that I was confusing the sections on distributions (Part II) with the sections on contributions (Part I). When I saw the side-by-side comparison of what I filled out versus what was correct, everything finally clicked. The tool highlighted exactly where my misunderstanding was happening. It saved me hours of frustration and probably helped me avoid a notice from the IRS. The explanations were way clearer than the IRS instructions too!

I wanted to update after trying taxr.ai for my HSA form issues. I was really surprised by how helpful it was! Uploaded my HSA statements and the partially completed 8889, and it immediately identified that I was confusing the distribution section with the contribution section. The visual comparison between what I had and what was correct made it instantly clear. For anyone struggling with Form 8889 - especially the difference between Part I and Part II - this tool is seriously worth trying. The explanations were in plain English, not tax jargon, and I finally understand how the whole form works together. I was able to fix everything and finish my return without the anxiety of wondering if I did it wrong. Wish I'd found this earlier!

If you're still stuck with this and need direct answers from the IRS, I had great luck using https://claimyr.com to actually get through to an IRS agent. I spent days trying to call about my HSA form issues but couldn't get past the automated system. The service got me connected to an actual IRS representative in about 20 minutes when I had been trying for days on my own. The agent walked me through the exact same Form 8889 Part 2 confusion and explained that distributions and contributions are handled in different sections. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - I was skeptical at first but desperate enough to try anything.

Ok I need to eat my words about Claimyr. After battling with my HSA form for days and not getting anywhere, I broke down and tried it. Within 45 minutes I was talking to an actual IRS tax specialist who knew exactly what was happening with my Form 8889. Turns out I was looking at the wrong part of the form entirely. The agent explained that Part II (lines 14-16) only deals with distributions FROM your HSA, not contributions TO it. She walked me through where excess contributions actually show up on the form and how to properly report them. For anyone stuck in HSA form hell, talking to an actual IRS agent made all the difference. They explained things way more clearly than any online guide.

Quick question - are you and your spouse on a family HDHP or do you each have individual plans? Because that affects your contribution limits for the HSA. If you have family coverage, the limit is higher than individual coverage. Also, did you make any additional contributions outside of your payroll deductions? Sometimes people forget about those and that's where the confusion comes in.

Has anyone noticed that the instructions for Form 8889 are absurdly complicated? I swear the IRS intentionally makes this stuff confusing. I have a masters degree and still can't figure out if I'm doing my HSA right.

I think I see where your confusion is coming from! You're absolutely on the right track - if you contributed $3,100 against a limit of $3,850, you have no excess contributions at all. You're actually $750 UNDER the limit. The key thing to understand is that Form 8889 has two main parts that deal with completely different things: - Part I (lines 1-13): This is about CONTRIBUTIONS to your HSA - Part II (lines 14-21): This is about DISTRIBUTIONS from your HSA What you're seeing in Part II (lines 14a/14b both showing $500) means you withdrew $500 from your HSA and used all $500 for qualified medical expenses. That's actually perfect - no taxes owed! If you had actual excess contributions, they would show up in Part I of the form, specifically around lines 6-8, and would be subject to a 6% excise tax. But since you're under your contribution limit, this doesn't apply to you. Your form is filled out correctly. The $500 on line 14b represents qualified medical expenses, not excess contributions. No additional taxes are due on this amount.