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June 6, 2019
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I paid out 4914 in medical expenses which 1000 includes deductions from my HSA but I'm only being credited with paying out 2500 roughly. Why?

  • June 6, 2019
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Best answer by BillM223

I am assuming that you are speaking about the Medical Expenses in Schedule A for Itemized Deductions. Let me explain how TurboTax works to see if that answers your question.

TurboTax expects the taxpayer to enter all medical bills (no matter how paid) in the Itemized Deduction interview (Federal->Deductions & Credits->Medical->Medical Expenses).

Then TurboTax does two things: (1) it asks the taxpayer for the amount of insurance reimbursement to net against the total medical bills, and (2) it carries the HSA distributions automatically to this process to net against bills paid with HSA funds. The result of which is only those bills that were paid with after-tax money, which may be deductible on Schedule A.

For taxpayers without an HSA, it doesn't matter if the taxpayer enters only the net medical expenses (i.e., net of insurance reimbursement), because in this case the effect is the same. But for HSA taxpayers, it's best to enter all medical bills in the Itemized Deduction interview, because the HSA distributions are going to be carried to the Medical Expenses interview no matter what.

1 reply

BillM223Answer
June 6, 2019

I am assuming that you are speaking about the Medical Expenses in Schedule A for Itemized Deductions. Let me explain how TurboTax works to see if that answers your question.

TurboTax expects the taxpayer to enter all medical bills (no matter how paid) in the Itemized Deduction interview (Federal->Deductions & Credits->Medical->Medical Expenses).

Then TurboTax does two things: (1) it asks the taxpayer for the amount of insurance reimbursement to net against the total medical bills, and (2) it carries the HSA distributions automatically to this process to net against bills paid with HSA funds. The result of which is only those bills that were paid with after-tax money, which may be deductible on Schedule A.

For taxpayers without an HSA, it doesn't matter if the taxpayer enters only the net medical expenses (i.e., net of insurance reimbursement), because in this case the effect is the same. But for HSA taxpayers, it's best to enter all medical bills in the Itemized Deduction interview, because the HSA distributions are going to be carried to the Medical Expenses interview no matter what.

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