If I am itemizing deductions and use HSA/FSA funds to reimburse myself for out-of-pocket medical expenses, should these be listed in TT as medical reimbursement? TurboTax uses the example of "if an insurance company pays you back for any expenses you paid out-of-pocket enter them here."
HSA/FSA funds are your own money that you put aside for medical expenses so I don't believe they should be entered to reduce your medical deductions.
Interested in the opinions of some tax experts and a tax publication that speaks to this topic.
The money you used from a HSA or FSA was money that was not taxed. You cannot double dip and then use the expenses paid with pre-tax money as a medical deduction too.
No, the reimbursement from a HSA/FSA for a medical expense is not entered on a tax return and the expense is not entered on Schedule A as an itemized deduction.
Go to this IRS website for information - https://www.irs.gov/individuals/frequently-asked-questions-about-medical-expenses-related-to-nutrition-wellness-and-general-health
Section 213 of the Code generally allows a deduction for expenses paid during the taxable year for medical care if certain requirements are met. Expenses for medical care under section 213 of the Code also are eligible to be paid or reimbursed under an HSA, FSA, Archer MSA, or HRA. However, if any amount is paid or reimbursed under an HSA, FSA, Archer MSA, or HRA, a taxpayer cannot also deduct the amount as a medical expense on the taxpayer's federal income tax return.
Yes, you should list the expenses that were reimbursed from the HSA, but not the FSA.
Turbotax assumes you are stupid. The program already knows that you got an HSA reimbursement from form 1099-SSA, so it will subtract the reimbursement from any medical expenses that you do list as itemized deductions. So you should list all your medical expenses, even ones that were reimbursed, and let the program do the math. It's not double-dipping, because the program will automatically subtract that amount.
However, because FSA reimbursements are not shown as income on your return, you should not list those expenses, because that would result in an inflated deduction.
As Opus 17 indicated, due to the way TurboTax handles HSA distributions, if you are itemizing medical expenses that were not paid with a distribution from the HSA or FSA, you must include in the medical deduction section those expenses paid from the HSA in addition to entering the Form 1099-SA in the HSA section. TurboTax automatically subtracts the amount reported on the code-1 Form 1099-SA from the total medical expenses entered before including the rest of the medical expenses on Schedule 1.
Nothing about expenses paid from the FSA goes anywhere on your tax return.
the following comments answered my question and provided the needed IRS documentation:
However, if any amount is paid or reimbursed under an HSA, FSA, Archer MSA, or HRA, a taxpayer cannot also deduct the amount as a medical expense on the taxpayer's federal income tax return.
Thank you very much to you and all others who responded.