What qualifies as an HSA purchase?

Can I buy shampoo with HSA?

Over-the-counter toiletries or personal hygiene items which may include, but are not limited to shampoo, toothpaste, conditioners, hand creams, deodorant, shaving cream, razors, dental floss, body powders, hair gels/sprays, make-up, nail polish accessories, soap, mouthwash, etc., are not reimbursable.

What happens if I accidentally used my HSA card for groceries?

You can repay the incorrect distribution before filing your federal taxes for that tax year. However, if you do not correct the mistake, the unqualified amount will be subject to income tax, and you may also face an additional 20% tax penalty.

What qualifies for HSA spending?

Generally, qualified expenses include doctor visits, medications, medical equipment, and dental and vision care for you, your spouse and any dependents.

What is the downside of an HSA?

Drawbacks of HSAs include tax penalties for nonmedical expenses before age 65, and contributions made to the HSA within six months of applying for Social Security benefits may be subject to penalties. HSAs have fewer limitations and more tax advantages than flexible spending accounts (FSAs).

Can you buy tampons with HSA?

Yes! Thanks to the CARES Act, tampons are now considered a “medical expense.” That means you can use pre-tax income to pay for them through your HSA. More questions about tampons? Learn the truth behind some of the most common tampon myths.

Is an Apple Watch HSA eligible?

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?

No, you can't use your Flexible Spending Account (FSA) or Health Savings Account (HSA) for straight food purchases like meat, produce and dairy. But you can use them for some nutrition-related products and services. To review, tax-advantaged accounts have regulatory restrictions on eligible products and services.

Can I use my HSA for a massage?

Your HSA can pay for massage therapy, though you'll likely need a letter of medical necessity (LMN) from your doctor. An LMN states what condition the treatment is for, how many sessions you need, and any other relevant details. An HSA may also be used on alternative or holistic treatments, such as: Massage therapy.

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.

How does IRS check HSA purchases?

Verification of expenses is not required for HSAs. However, total withdrawals from your HSA are reported to the IRS on Form 1099-SA. You are responsible for reporting qualified and non-qualified withdrawals when completing your taxes.

Can I buy a toothbrush with HSA?

Unfortunately, most products for oral health care are not currently eligible medical expenses for FSA and HSA spending.

Can I use HSA for dental?

Your HSA also covers expenses for standard dental cleanings and dental check-ups. One thing to keep in mind is that some of these procedures may have a co-payment, so it's important that you check with your dental insurance provider to find out exactly what you'll have to pay out of pocket.

What disqualifies you from contributing to an HSA?

If you can receive benefits before that deductible is met, you aren't an eligible individual. Other employee health plans. An employee covered by an HDHP and a health FSA or an HRA that pays or reimburses qualified medical expenses can't generally make contributions to an HSA. FSAs and HRAs are discussed later.

Is it better to have an HSA or copay?

If you don't have an HDHP, have a family, and require frequent diagnostic medical care, a copay plan may be a better option. Neither an HSA or copay plan is better than the other; you just need to decide which plan meets all of your needs and will benefit you the most.

Is a gym membership HSA eligible?

Gym memberships. While some companies and private insurers may offer discounts on gym memberships, you generally can't use your FSA or HSA account to pay for gym or health club memberships. An exception to that rule would be if your doctor deems fitness medically necessary for your recovery or treatment.

Are air purifiers HSA eligible?

Air Filter: HSA Eligibility

Air filter for general use not eligible. Air purifiers that are not purchased to treat or alleviate a medical condition and where a Letter of Medical Necessity is not obtained are not eligible.

What can HSA not pay for?

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 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.

What are HSA eligible purchases?

What if I never use the money in my HSA?

Myth #2: If I don't spend all my funds this year, I lose it. Reality: HSA funds never expire. When it comes to the HSA, there's no use-it-or-lose-it rule. Unlike Flexible Spending Account (FSA) funds, you keep your HSA dollars forever, even if you change employers, health plans, or retire.