Can i deduct medical expenses I had that i didnt not pay for with my hsa?

[frobiebr549]

I have an HSA.  I paid for some medical expenses with the HSA.  I also paid medical expenses out of pocket.  How do I account for this in 2016 Turbo tax?

[xmasbaby0 · Accepted solution]

Medical expenses that you paid out of pocket can be entered under the Medical Expense deduction.

The medical expense deduction has to meet a rather large threshold before it can affect your return. The amount of medical expenses that will count toward itemization for someone under 65 is the amount that is OVER 10% of your adjusted gross income; for someone 65 or older it would be the amount over 7.5% of your AGI.  

You should only enter the amount that you paid in 2016—do not include any amounts that were covered by insurance or that are still outstanding.  Of course, your medical expenses plus your other itemized deductions still have to exceed your standard deduction before you will see a difference in your tax due or refund.

To enter your medical expenses go to Federal>Deductions and Credits>Medical>Medical Expenses

[dmertz]

Under Deductions & Credits, when you enter the amount that you paid out of pocket, be sure to include the amount paid with distributions from the HSA.  TurboTax automatically subtracts the amount reported as distributions from your HSA used for medical expenses and only includes the remainder on Schedule A line 1.

Note that for any qualified medical expenses incurred after the date on which you established your HSA, for expenses paid out of pocket you can reimburse yourself with a distribution from the HSA at any time in the future as long as you do not include on any year's Schedule A line 1 the amount you will be reimbursing yourself with a distribution from the HSA.  This can be useful if you do not have sufficient medical expenses to put you well over the 10% (or 7.5%) of AGI threshold.

[Taxes___AmIRight]

According to TurboTax itself:

Can I deduct medical expenses that were paid with an HSA, MSA, FSA or HRA?
No, you can't deduct medical expenses that were paid with a health savings account (HSA), medical savings account (MSA), flexible spending account (FSA) or health reimbursement account (HRA). These are all pre-tax accounts, and you can't deduct medical expenses that were paid with a pre-tax account.

When you use a pre-tax account to pay for medical expenses, you're paying with tax-free money. You're not allowed to deduct tax-free money because it's considered double-dipping.

With the increased standard deduction starting in tax year 2018, the chances of being able to deduct medical expenses is significantly lower. Taking the medical expenses out of a pre-tax account is more beneficial to the taxpayer than taking the expenses as a deduction in the event you take the standard deduction