• HSA record-keeping

    From Michael F. Stemper@21:1/5 to All on Thu Jul 1 15:47:42 2021
    I received a 5498-SA the other day, which reminded me that I still have
    an HSA sitting around. I've never actually used it, so I'm a little
    vague on how they work.

    Do I need to keep track of medical expenses that are paid by the HSA?
    Put them on Schedule A and then declare the money coming out of it
    as income? Or does the fact that the two offset each other mean that
    neither will show up on my 1040 (and schedules)?

    --
    Michael F. Stemper
    The name of the story is "A Sound of Thunder".
    It was written by Ray Bradbury. You're welcome.

    --
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  • From Bob Sandler@21:1/5 to All on Thu Jul 1 16:15:41 2021
    I received a 5498-SA the other day, which reminded me that I still have
    an HSA sitting around. I've never actually used it, so I'm a little
    vague on how they work.

    Do I need to keep track of medical expenses that are paid by the HSA?

    Yes, you have to keep track.

    Put them on Schedule A and then declare the money coming out of it
    as income? Or does the fact that the two offset each other mean that
    neither will show up on my 1040 (and schedules)?

    Medical expenses that you pay from your HSA cannot be
    deducted on Schedule A.

    The amount you took out of the HSA, and the amount you used
    for qualified medical expenses, go in Part II of Form 8889.
    If those two amounts are equal, i.e. all the money from the
    HSA was used for qualified medical expenses, then it doesn't
    appear on Form 1040 or anywhere else besides Form 8889. If
    any money from the HSA was not used for qualified medical
    expenses, that amount will be reported as income on Schedule
    1. Unless you qualify for an exception, the amount that was
    not used for qualified medical expenses will also be subject
    to an additional 20% penalty.

    Bob Sandler

    --
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  • From John Levine@21:1/5 to All on Fri Jul 2 21:10:09 2021
    According to Michael F. Stemper <michael.stemper@gmail.com>:
    I received a 5498-SA the other day, which reminded me that I still have
    an HSA sitting around. I've never actually used it, so I'm a little
    vague on how they work.

    Think of it as an IRA with a trap door you can use to pay medical expenses.

    Do I need to keep track of medical expenses that are paid by the HSA?

    As others have said, yes but in the common case that you only take money
    out of the HSA to pay medical expenses, it's not income and doesn't appear anywhere else.

    I have an HSA that is mostly in stocks, so it is doing great this year
    and I am not inclined to take any money out at this point. My HSA
    custodian, Lively, makes it easy to track the medical expenses but not reimburse them, so I can save them up and use them to take a tax-free withdrawal sometime in the future.

    --
    Regards,
    John Levine, johnl@taugh.com, Primary Perpetrator of "The Internet for Dummies",
    Please consider the environment before reading this e-mail. https://jl.ly

    --
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    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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