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Generally, if you made contributions (this includes what your employer contributed) that appear to be clearly under the limit, and the entire amount of the contributions is considered by TurboTax to be in excess, then the cause is that the taxpayer has not gone through the HSA interview in TurboTax, which allows
The information on Form 5498 is submitted to the IRS by the trustee or issuer of your individual retirement arrangement (IRA) to report contributions, including any catch-up contributions, rollovers, repayments, required minimum distributions (RMDs), and the fair market value (FMV) of the account.
TurboTax generates the 5329 if it discovers that you owe extra tax on a variety of situations, such as excess contributions to an HSA, early distributions from a retirement plan, failure to distribute Required Minimum Distributions, and so on.
Key Takeaways. Form 5329 reports a taxpayers use of a tax-advantaged savings plan that is subject to an IRS penalty. The form is filled out and submitted by the taxpayer with an annual Form 1040 or Form 1040-SR.
You may need this form in three situations: early distributions from a tax-favored account. excess contributions to a tax-favored account. failing to take required minimum distributions.
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People also ask

Use Form 5329 to report additional taxes on IRAs, other qualified retirement plans, modified endowment contracts, Coverdell ESAs, QTPs, Archer MSAs, or HSAs.
Yes, TurboTax will automatically calculate an underpayment penalty based on failing to pay estimated taxes or having enough withholding (if one is due). During the interview, TurboTax will prompt that you are being charged for an underpayment penalty but it tends to come up as one of the very last items before filing.
In general, you must file Form 5329 to report an exception to the 10% additional tax on an early distribution from a qualified retirement plan, including an IRA .

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