New client who tried to prepare their own tax return, came to me having trouble with their Code W amt (on W-2) appearing on Ln 21 form 1040. Client says they also had a balance in their HSA at the end of the year. I went back and looked at a return I prepared in 2011. Same situation, Code W amt and family plan w/HSA balance at end of the year. Filed form 8889-S and no amt appeared on Ln 21. Anything changed in 2012 that I am missing?
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The reason it is showing up on line 21 is because the software requires you to check a box indicating whether the taxpayer qualifies for single coverage or for family coverage. If the taxpayer does not indicate that he/she actually qualifies to contribute to an HSA, then the W-2 code W amount will show up as taxable on line 21. -
I can go out and buy a hammer. That does not mean I know how to hit a nail on the head.Originally posted by AZ-Tax View Post
Just because people can buy tax software doesn't mean they know how to prepare a tax return.Comment
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Maybe you should say that this is one of the mystery of tax preparation and that you are more than happy to do the tax return again.Comment
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The comment I love is when you tell someone they did it wrong, they say "but they accepted it!" Like it is going to reject right there on the spot because they took an incorrect deduction. I have always said software is wonderful as a tool, but you better know the answer before you put it in, or you can be in big trouble.Comment
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