Medical expense deduction and HSA distributions

[CO Doug 345]

I've had an HSA for years and have mainly used it to pay relatively small medical expenses as they come in. In 2024, I had enough expenses that I can itemize them and deduct the amount over 7.5%. I haven't made any contributions to or distributions from the HSA for 2024.

I think that if I now make a contribution for 2024, I can simply deduct that amount on my 2024 return in addition to taking the medical expense deduction. Is that correct?

I'm hoping not to have significant medical expenses this year, so my main question is, now, in 2025, if I make any distributions to reimburse myself for the 2024 expenses, what happens? From what I've spent the last couple of days trying to figure out, it sounds like that would be considered "double-dipping" and I'd somehow have to account for that? And if that's right, should I just plan to never reimburse myself out of the HSA for the 2024 expenses?

Thanks in advance for any help. I've read all the forum posts I could find, plus IRS pubs 502 and 969, but still feel kind of lost.

[MaryK4 · Accepted solution]

If you qualify to make a contribution to your HSA for 2024, you can deduct it and it will not affect your Schedule A medical deduction.  You cannot use the HSA distributions for 2025 to reimburse any medical expenses that you deducted in 2024.  You should not use the HSA distributions for anything that you deducted.  It will be an unqualified distribution and you will have to pay the 20% additional tax.  (Note: There is no additional tax on distributions made after the date you are disabled, reach age 65, or die.)

[CO Doug 345]

Thanks very much for your response.

I've now put some numbers into TurboTax and it looks like I'm better off contributing the maximum to my HSA for 2024 and NOT taking anything for the medical expense deduction. Is that allowed? And if so, is there any reason I can't then immediately use that contribution to reimburse myself for the 2024 expenses?

Thanks again.

[MindyB]

Yes, what you suggest is allowed.  You can directly contribute to the HSA, request the contribution be applied to 2024, so that you can still contribute up to the limit in 2025, and reimburse yourself for any expenses you have not already been reimbursed for.  It does not matter if the money was contributed after the expense was incurred. 

Here is some information you may find helpful: IRS Publication 969

[CO Doug 345]

Thanks for the help!