BillM223
Expert Alumni

Deductions & credits

Yes, it sounds correct.

 

Doing it the reimbursements this way (you pay medical provider out-of-pocket, then contact the HSA custodian to get a distribution to cover that amount) is fine, but it does put the burden of record keeping on you, because you have to (1) show that you paid those expenses and (2) you have to show which distribution (or which part of which distribution) from the HSA went to reimburse you for which expense. Fortunately, there does not have to be a one to one relationship here.

 

This is why most HSA owners get a debit card, so that they can directly pay medical expenses from the HSA. Because of the way the debit card is implemented, you can't use it to pay for non medical items - the card reader generates an error code.

 

However, either way is fine.

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