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2023-11: Warosu is now out of extended maintenance.

/biz/ - Business & Finance

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54337311 No.54337311 [Reply] [Original]

I feel as though /biz/ is the correct board for this very dumb question. I have looked online, but nothing is giving me a straight answer.

I have an HSA, however I am not making contributions to it anymore. Obviously, if I use the HSA funds on non-medical expenses, the IRS won't like that.

My question is, if I reimburse the funds that are in my HSA to my personal bank account and then use that money on non-medial expenses,
will the IRS penalize me? Am I freaking out about nothing?

Thank you in advance.

>> No.54337365
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54337365

>>54337311
Yes, if you withdraw funds from your Health Savings Account (HSA) for non-medical expenses, the IRS will impose a penalty tax on the amount you withdraw, which is currently 20% of the withdrawn amount. In addition to the penalty tax, you will also owe income tax on the amount you withdrew, which will be added to your taxable income for the year.

If you withdraw funds from your HSA for non-medical expenses, but then reimburse those funds back into your HSA, the IRS will not penalize you. However, you will need to ensure that the funds are properly accounted for as a reimbursement and that you keep records of the transaction.

It's important to remember that the funds in your HSA should only be used for qualified medical expenses. If you use the funds for non-medical expenses without reimbursing them, you will be subject to the penalty tax and income tax.

>> No.54337436

>>54337365
OP here.
If that is the case, would it be better to close the account and not have the HSA anymore? I don't plan on using it at all.

>> No.54337468
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54337468

>>54337436
I don't even need to input your question into ChatGPT to tell you that your HSA is useless if you don't plan on using it.

>> No.54337492
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54337492

>>54337468
Just trying to avoid things with the government. but i appreciate the help.

>> No.54339182

You could save up until you need a qualified medical expense and then reimburse yourself. You can literally pay out of pocket and then get the reimbursement penalty free in 25 years.

Listen to “money guy” podcast they are a wealth of info.

I personally use my HSA for contacts.

>> No.54339616

>Can I use untaxed money that's specifically flagged for qualified medical expenses for other things without the IRS getting mad?
Is that your question? Are you retarded?

>> No.54339863

find a small local grocery store or drug store and buy a pack of band-aids with your HSA credit card. photograph the receipt, upload it. then, return the band aids and ask for cash. if they give you cash, go back and buy a bunch of HSA-approved shit. if they don’t give you cash, try another store.

>> No.54339954

>>54339863

Kek. Remember when Americans would just dump the bandaids in the oceans.