To determine your total deductible medical costs for 2025, you only include the expenses you paid during that year that were not reimbursed by your HSA or insurance.
Based on your numbers, you start with the $17,000 total paid in 2025 and subtract the $2,000 HSA distribution that was used specifically for those 2025 costs. The $700 distribution used for 2024 expenses is not part of this year's deduction because you cannot include expenses that are paid with tax-free HSA funds. Therefore Line 14 of your Medical Costs Worksheet is $15,000.
