How do I keep my HSA receipts?

What is HSA receipt loophole?

The Adult Child HSA Family Contribution Loophole

That's why you can do things like save receipts for decades and then pull the money out of the account. That's why you can use it as a stealth IRA by investing in it for decades and then pulling it out after age 65 penalty-free and buying a sailboat with it.

Do I need to save my HSA receipts?

Always save your receipts and supporting documentation for your records. While Benefit Resource will not ask you to provide a receipt for an HSA expense, you are responsible for maintaining documentation of account use in the event that you are ever audited by the IRS.

What are the most common mistakes for HSA?

Can I use my HSA for gym membership?

Generally, the IRS doesn't allow pretax dollars in HSAs or FSAs for gym memberships. This is because they see them as expenses for general well-being rather than medical necessity. However, with a Letter of Medical Necessity (LMN), your HSA or FSA could be used to fund those expenses.

Can I buy deodorant with HSA?

Deodorant reimbursement is not eligible with a flexible spending account (FSA), health savings account (HSA), health reimbursement arrangement (HRA), limited-purpose flexible spending account (LPFSA) or a dependent care flexible spending account (DCFSA).

What is the 12 month rule for HSA?

It means you must remain eligible for the HSA until December 31 of the following year. The only exceptions are death or disability. If you violate the testing period requirement, your ineligible contributions become taxable income.

Can I buy vitamins with HSA?

In general, vitamins are not considered an HSA eligible expense unless they are prescribed by a doctor for a specific medical condition.

Can I use my HSA for glasses?

Both FSA and HSA pre-tax health accounts can be used to pay for prescription glasses, contact lenses, eye exams and more. Eyewear that corrects your vision is considered a medical product, which means you can use your health plans to help cover the cost.

Can you save too much in HSA?

Yes, there is a penalty for exceeding the annual HSA contribution limit. This penalty is known as an excise tax. The IRS imposes excise taxes to discourage certain behaviors, such as making excess contributions.

Should I keep cash in my HSA?

Determine if you plan to use your HSA to pay for current qualified medical expenses or if you will pay from another source of personal savings. Consider setting aside a "cash target"—the amount of cash in your HSA used to pay for current qualified medical expenses. Then consider investing the remaining amount.

Can you use HSA for messages?

Using your HSA for massage therapy and holistic care

Your HSA can pay for massage therapy, though you'll likely need a letter of medical necessity (LMN) from your doctor.

Is the Apple Watch HSA eligible?

Why other fitness trackers don't qualify. Even though Fitbits and Apple Watches measure important health data, they currently do not qualify for HSA reimbursement, as they are considered for general health use and not intended to treat or manage a specific medical condition.

Can I use HSA for groceries?

As mentioned earlier, using HSA funds directly for groceries is not allowed under current IRS regulations. This can be seen as a downside for individuals looking to use their HSA money for day-to-day expenses.

Can I buy protein powder with HSA?

Generally, you can't use your HSA to pay for expenses that don't meaningfully promote the proper function of the body or prevent or treat illness or disease. Nutritional supplements and weight loss programs not prescribed by a physician are examples of expenses that would not be covered by your HSA.

What if I accidentally bought food on my HSA?

Yes, you read that correctly—even if you accidentally paid for a burger with your HSA debit card, you will have to report it on your annual income tax return and pay taxes on it. If you're under 65 and spend the money on unqualified purchases, you must also pay a 20% penalty on top of the income tax.

What is one downside of an HSA?

Weak earnings and investment limits: Interest rates on HSA accounts may be low and some trustees charge a monthly fee if your balance drops below a certain threshold. Minimum balance requirements may apply before you can invest; investment options may be limited, and investments are not insured.

What happens if I don't have enough money in my HSA?

If you do not have enough money in your HSA to pay for an eligible medical expense you will need to pay for the expense by some other means. Once the money is in your HSA account, you can withdraw the amount that you paid and reimburse yourself.

What app to store HSA receipts?

The HSA Central app so helpful when it comes to organizing the health expenses of my family. I can pay medical expenses with my debit card and then upload a picture of the receipt. If I'm in Target and want to double check if an item is eligible for HSA reimbursement, I can scan the item in the app and see right away.

Does IRS check HSA receipts?

The IRS requires that you keep receipts for all your Health Savings Account (HSA) spending. HSA distributions (money taken from an HSA account) are nontaxable, but only when the money is used to pay for qualified medical expenses.

What to do with HSA if you don't use it?

Unspent HSA funds roll over from year to year. You can hold and add to the tax-free savings to pay for medical care later. HSAs may earn interest that can't be taxed. You generally can't use HSA funds to pay premiums.