Board 8 > Anyone good at tax questions? HSA specifically

(+) Yeah! (+)

So I feel like my W2 I received from my company is wrong.

My company changed our healthcare mid-year to a HSA system but also changed it so that healthcare was free rather than us contributing towards it. I thought no problem, all the money I was contributing towards the previous plan I would just put into the HSA.

Except now on my W2 all the money I put into the HSA is tagged as 'W' which says the employer put that money into the account for me which is not the case, I voluntarily put my money into it. So it counts as additional earnings and decreases my return. It looks like it decreases it by the amount I would have been taxed on if that was normal income which doesn't seem right for 2 reasons to me. HSA's are supposed to be Tax Free right otherwise why wouldn't I just dump it into savings instead? And that money isn't additional earnings as it is my own money, not extra money the company is giving me.

Or am I misunderstanding how HSA earnings are supposed to work? Like if that is working as intended, what is even the benefit of using a HSA instead of a savings account as it looks like I'm getting taxed on it both ways anyway and a savings account would at least have the benefit that I could spend it on other stuff if I needed/wanted to.

@Arti

disclaimer: he probably wont know since hes a buttface
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If you're misunderstanding, then I am too, because I've been under the assumption that the entire point is to have an area that you'll spend money for anyway to have less taxable income on hand. The HSA is supposed to be for "Well if I know i"m going to spend $1,000 on health services, I might as well put it in the HSA so that I now only have $19,000 in taxable income instead of $20,000"
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Are you using turbo tax? There should be another section where you enter more info after entering your W-2. I'm guessing this will correct it.
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I was trying to run it through Taxact, I guess I could try TurboTax instead, I assumed they would be the same

I got switched to an HSA mid-year too and noticed the W. Damn tax laws!
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The internet says:

It has already been deducted off your W-2. Code "W" is for both employer paid amounts and amounts that you had taken from your paycheck. Your HSA contributions are taken pre-tax from your paycheck, so it has already been 'deducted' for tax purposes.

When you enter code "W" from box 12 of your W-2 and tell TurboTax that you have a High Deductible Health Plan (HDHP), TurboTax should properly fill out Form 8889. There is nothing else that you would need to do.

Just double check that something wasn't missed. Check Form 1040, line 21 to make sure the HSA is not being taxes, and line 60 to make sure it is not charging you a penalty.
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ShatteredElysium posted...

I was trying to run it through Taxact, I guess I could try TurboTax instead, I assumed they would be the same

It should be similar, just go all the way through and see if it clears up.
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