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7 Answers

If I pay for medical expenses with an HSA can I still claim tax deductions?

Asked by: lpliskin 1215 views YA Discussion

My wife just had our first child and it is time to pay the hospital bill. I want to use my HSA but I am concerned that I won’t be able to claim the medical deductions if I do.

7 Answers

  1. Go with the flow on Apr 03, 2012 Reply

    Not an expert. But you already got a tax break by putting money in your HSA tax free.
    Logic would tell me that you can’t take another tax deduction.

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  2. Bob F on Apr 03, 2012 Reply

    The whole purpose of an HSA is to let those of us who spend less than 7.5% of our AGI, and those people who don’t itemize deductions, to be able to pay our health costs with non-taxed dollars. The time to consider this has long passed. What you should have done is made a decision during open enrollment to either
    a) put a lot of money into the HSA so that more of your money is not subject to taxes
    b) opt out of the HSA if you were sure your total medical expenses would be over 7.5% of your AGI so you could deduct the costs on your schedule A.

    Oh, so what I’m saying is use the HSA dollars, they are already not taxed.

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  3. Wayne Z on Apr 03, 2012 Reply

    Use the HSA money.

    However, medical expenses paid from HSA money are not deductible as you have already received the tax benefit.

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  4. Judy on Apr 03, 2012 Reply

    No you can’tT double dip, and you already got the deduction for the HSA money.. But use the HSA money. There’s a real good chance you wouldn’t end up being able to deduct it anyway if you paid it outside the HSA. And at best you’d come out even, if you had a ton of other medical expenses that year.

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  5. the kid on Apr 03, 2012 Reply

    No, b/c the HSA money was already not taxed. You are already getting a better tax break than by claiming them as a deduction. Also, if you DON’T use yoru HSA funds by the end of the year, you lose them in most cases.

    You can claim any expenses as a decution that are non-remibursed, and HSA funds count as reimbursement. The medical expenses can only be deducted above 7.5% of your AGI.

    So say you spend $ 15,000 and use $ 5,000 in HSA funds. You can still deduct the portion of the unremibursed $ 10,000 that is above 7.5% of your AGI.

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  6. Bobbie on Apr 03, 2012 Reply

    And of course you already knew the CORRECT answer when you asked the above question because that was the reason that you set up your HSA plan for this purpose was to keep from paying income taxes on the amount that you contributed to the HSA when the amounts would be used to pay for qualified medical expenses during the tax year.
    And NO not possible this way.
    Only UNREIMBURSED amounts that are used from AFTER income tax funds and that were NOT REIMBURSED by any INSURANCE payment amounts.
    Hope that you find the above enclosed information useful. 04/03/2012

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  7. Bostonian In MO on Apr 03, 2012 Reply

    Of course not! You already got the tax break by using the HSA since that money was never taxed. If you use the HSA, you can’t deduct the same expense since that would be double-dipping.

    You get a BETTER tax break with the HSA since you don’t have to contend with the 7.5% limitation on medical expense deductions on Schedule A. And you get the tax break even if you don’t itemize.

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