@John1955 wrote:
I am retired. In 2020 I began filing claims from my HSA for eligible expenses (prescription copays, doctor copays). I am claiming these copays as medical deductions. If I have been reimbursed, do I simply not claim them, claim them anyway, or show the expenses and report these distributions even though my HSA does not report these distributions to the IRS? And how would I report these distributions in my tax return? I don't meet the threshold for Medical Expenses for the Federal Government but it does affect my state return.
What do you mean by, "If I have been reimbursed,"?
If you have been reimbursed tax-free for a medical expense, and you then also claim it for reimbursement from your HSA, then the reimbursement is taxable income, because you can't pay for an expense with tax-free money and also get a tax-free reimbursement. This would be entered as a "taxable recovery" in the "uncommon income" section. It would be best not to take HSA reimbursements for expenses that were already reimbursed by some other method.
The issue that Bill describes when trying to deduct medical expenses in Turbotax is because Turbotax is written to assume that you can't determine your own deductible medical expenses. It asks for total expenses and then asks for reimbursements, so if you reimburse yourself for an old expense, it will reduce your current deduction unless you take the steps Bill outlined. However as I said, it would be best not to reimburse yourself for anything that was already reimbursed. Stick to your out of pocket non-reimbursed expenses.
