HSA

Forum|Forum|4 years ago
January 12, 2022
2 replies
31 views

For some of the year, I did not have money in my hsa account & so I paid some health expenses out of pocket, with after tax money. It was about $2500, is there no way to claim that somehow? I do 1040 & don't itemize, since they raised the standard deduction a few years back.

Thanks for any responses

Not A Product Question

Best answer by Opus 17

@georgiabulldogs111 wrote:

Ok, that is how it seemed to be, based on what I could find. So I have some from each paycheck put into my hsa (pretax, of course) So the only way to get the pretax benefit is via payroll deduction? If I transferred $2000 of after tax money into the hsa, can I claim that somewhere?

I'm afraid @xmasbaby0 missed the importance of the HSA account here.

The key fact is that the HSA can only be used to reimburse expenses that were incurred after the account was opened. As long as that condition is met, you can reimburse yourself after the fact and at any time you like when there are funds in the account. You are also allowed to make contributions of out-of-pocket funds, up to your annual maximum, of course. If you are not contributing the maximum through payroll, you can add out of pocket contribution by making a deposit directly to the HSA bank, probably via the same linked bank account you use to get your reimbursement.

That means it is possible to make a deposit, then reimburse yourself for some past expense as soon as the money is credited to your account, and take a tax deduction for the amount of the deposit.

Remember that the contribution maximum for 2021 is $3650 if you are covered by a single HDHP, and $7100 if you are covered by a family HDHP. Also, you can make a contribution for the 2021 year as late as April 15, 2022 (the tax filing deadline); but be aware that there will be some procedure to follow to notify the bank before you make the deposit that the incoming deposit is for 2021 and not 2022.

So yes, you can make a deposit to your HSA now for 2021 (if the bank is properly notified, and up to your annual maximum) and then withdraw it in a few days to reimburse yourself, and you will claim the tax deduction on your tax return. In Turbotax, contributions by payroll deduction (including your funds and any employer funds) are reported on your W-2 only. Later in the program it will ask for out of pocket contributions, that's where you will enter your additional contributions but don't enter your payroll deductions again.

X

xmasbaby0

Level 15

Sorry---if you do not itemize deductions there is not a way to recover the money you spent out of pocket on medical expenses via your tax return. It is very hard to use the deduction for medical expenses even if you itemize because you can only use the out of pocket amount that is OVER 7.5% of your AGI.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

G

georgiabulldogs111Author

Level 2

Ok, that is how it seemed to be, based on what I could find. So I have some from each paycheck put into my hsa (pretax, of course) So the only way to get the pretax benefit is via payroll deduction? If I transferred $2000 of after tax money into the hsa, can I claim that somewhere?

O

Opus 17

Answer

Level 15

@georgiabulldogs111 wrote:

Ok, that is how it seemed to be, based on what I could find. So I have some from each paycheck put into my hsa (pretax, of course) So the only way to get the pretax benefit is via payroll deduction? If I transferred $2000 of after tax money into the hsa, can I claim that somewhere?

I'm afraid @xmasbaby0 missed the importance of the HSA account here.

The key fact is that the HSA can only be used to reimburse expenses that were incurred after the account was opened. As long as that condition is met, you can reimburse yourself after the fact and at any time you like when there are funds in the account. You are also allowed to make contributions of out-of-pocket funds, up to your annual maximum, of course. If you are not contributing the maximum through payroll, you can add out of pocket contribution by making a deposit directly to the HSA bank, probably via the same linked bank account you use to get your reimbursement.

That means it is possible to make a deposit, then reimburse yourself for some past expense as soon as the money is credited to your account, and take a tax deduction for the amount of the deposit.

Remember that the contribution maximum for 2021 is $3650 if you are covered by a single HDHP, and $7100 if you are covered by a family HDHP. Also, you can make a contribution for the 2021 year as late as April 15, 2022 (the tax filing deadline); but be aware that there will be some procedure to follow to notify the bank before you make the deposit that the incoming deposit is for 2021 and not 2022.

So yes, you can make a deposit to your HSA now for 2021 (if the bank is properly notified, and up to your annual maximum) and then withdraw it in a few days to reimburse yourself, and you will claim the tax deduction on your tax return. In Turbotax, contributions by payroll deduction (including your funds and any employer funds) are reported on your W-2 only. Later in the program it will ask for out of pocket contributions, that's where you will enter your additional contributions but don't enter your payroll deductions again.

Mike9241

Level 15

In order for a medical expense to be eligible for reimbursement from a Health Savings Account (HSA), the expense must have been incurred after the opening of your HSA account. So, for example, suppose you opened an HSA account on 1/1/2021 and funded it with $100. You paid the $2,500 with funds outside the HSA. In January 2022, you contributed $3,000 to your HSA account. Then you request an HSA reimbursement for the $2,5000 incurred in 2021. This is allowed.

Mike9241