HSA Deductions?
I opened an HSA in fall of 2022. Last year I received a $600 HSA deduction on my taxes last year. This year I contributed $3,105 to my HSA and I received a $0 deduction. All HSA payments both years were paid through employer deductions. Any idea why I would not have gotten it this year. Should I be entering my HSA contributions in a certain way to receive the deduction credit?
Answers
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Hi hofschma! Generally, you can claim HSA contributions you made and contributions made by any other person, other than your employer, on your behalf, as a deduction. The reason for this is that contributions made by your employer aren’t included in your income, so they are already tax free. HSA contributions made through an employer are usually shown in Box 12 of your W-2.
You can refer to IRS Publication 969 for more information on reporting HSA contributions on your tax return. See pg 8.
In the software, you report HSA contributions and distributions by selecting Deductions/Credits > Other Deductions/Credits > Health Savings Account (HSA) from the menu. On that screen, any HSA contributions made through your employer will automatically be populated by the software based on your W-2 entries. You will also be asked about contributions not through an employer. Only the contributions NOT made through your employer will be used to calculate the HSA deduction on Form 8889.
If you received the HSA deduction last year and not this year, it is likely that you reported HSA contributions not through an employer last year. You should review your entries for last year and see if that is the case. You can sign in to the 2022 software here: https://www.freetaxusa.com/2022
If you are still unsure about the reason for the difference in calculations, Customer Support would be happy to look over your account and help clarify things for you. Please sign in to your account and contact us there so that we can review your entries and get you the help you need for this issue.
