Using HSA receipts

[Sunset]

i also had an HSA for many years, first time i withdrew was a couple years ago , over 20K, and nothing from IRS.

It is longer than 2 years before you are past an audit, and even longer if fraud.

 

[pb4uski]

I did it recently for 2010-2019. I had Quicken records of our medical costs from 2010 to 2019, EOBs for all those years and many receipts (but not for all EOB amounts due). In some cases where I had negotiated a discount with the provider/hospital for an additional discount for immediate payment I used that lower amount that I actually paid rather than the EOB. Total was about $18k so about $2k a year.

I have a 1-2" thick file of a memo, Excel printout and EOBs and receipts in case the IRS ever asks.... but I doubt that they ever will... I think they have bigger fish to fry.

Public Service Announcement: If you do a HSA withdrawal as I did above in 2020, when you do your tax return don't forget to report the withdrawal on a Form 8889... and in my case, report that the $18k was used for qualified medical expenses so none of it it taxable.

If you don't, as I did, the IRS sends you a friendly letter asking why the withdrawal wasn't reported and asks you to send them a 1040X.

Don't ask me how I know about this.

 

[jollystomper]

One nice improvement, almost all of our medical providers are providing electronic receipts via email or downloads from the billing site. For me these are easier to store and cross-reference in my summary spreadsheet.