Medical Costs when there are HSA distributions

[eisenbeis]

I'm trying to properly account for medical costs when distributions from an HSA are involved, including distributions from prior years.  Here is an example: My total medical costs for 2025 were $17,000 ($15,000 were not reimbursed, $2,000 were reimbursed in 2025 via my HSA).  I had total distributions of $2,700 ($2,000 were related to 2025 costs and $700 from 2024 costs). Based on that info what should the answer be for "Total Deductible Medical Costs" line 14 of the Medical Costs Worksheet (which flows to line 1 of Schedule A)? Thank you.

[MindyB]

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.

[dmertz]

"what should the answer be for "Total Deductible Medical Costs" line 14 of the Medical Costs Worksheet (which flows to line 1 of Schedule A)?"

$15,000.

When asked, "Tell us about any other medical expenses,"  make sure to enter $700 for 2024 qualified medical expenses paid from the HSA in 2025.  TurboTax subtracts the entire amount paid from the HSA, not just the part of the HSA distributions used to pay 2025 expenses (because TurboTax  has know way to know the breakdown).