How is TurboTax calculating line 13 (HSA deduction) on Form 8889?
Form 8889, line 13 contains the following instructions:
13. HSA deduction. Enter the smaller of line 2 or line 12 here and on Form 1040, line 25, or Form 1040NR, line 25.
Caution: If line 2 is more than line 13, you may have to pay an additional tax.
However, TurboTax is entering the larger of the two lines.
One reason Form 8889, line 13 may be calculating differently than the instructions is because of an excess HSA contribution for 2010. See the IRS instructions for Form 8889, line 13.
To see if this is the case, look for an amount on Form 5329, line 42. This is where 2010 excess HSA contributions are reported on your 2011 return. TurboTax may have automatically transferred this over from your 2010 return (if you had an excess contribution in 2010), or you may have entered this yourself in the Less Common Income section of the TurboTax interview.
Another reason line 13 may appear to be calculating incorrectly is when there are gross excess employer contributions; that is, when the amount on line 9 on Form 8889 exceeds the amount on line 8. You'll see this excess contribution on line A in the Line 12 Excess Employer Contributions Worksheet, directly above line 13.