Using An HSA To Purchase Non Medical Related Item

[ownyourfuture]

Went to Walgreens to pick up a prescription last night. Drive-through was closed so I had to go inside. Doctor tells me I have to increase my sodium intake, so as I was leaving, I noticed Digiorno stuffed crust Pizza on sale & thought I'd treat myself to one.

Unfortunately, I had only brought my HSA debit card along.
It got me thinking. What if I'd thrown caution to the wind and said I'm going to buy it anyway ?

Would that raise any red flags ?
Would it be easy to correct if it did ?

 

[RunningBum]

Are you over 65? If so it's just a taxable HSA withdrawal. Works like a tIRA withdrawal.

Under 65? It's taxable plus a 20% penalty, unless you replace it by Apr 15 of the following year.

https://hsaforamerica.com/blog/how-to-fix-the-most-common-hsa-mistake/

If you abuse it by taking out a lot of money and then returning in before the tax deadline I'm sure that will raise a big red flag and I expect you'll be paying that 20% penalty.

 

[ownyourfuture]

Are you over 65? If so it's just a taxable HSA withdrawal. Works like a tIRA withdrawal.

Under 65? It's taxable plus a 20% penalty, unless you replace it by Apr 15 of the following year.

I'm 61 & would never use it to purchase something that wasn't qualified.
Just wondered what the repercussions would be if I did & you answered that.
Thanks

 

[Montecfo]

Let's say you used it to buy the pizza for $20 at the drugstore. Then let's say you had previously spent $20 at the grocery store to buy some Sudafed and you used a regular credit card.

The pizza purchase would not be taxable, as long as you kept records to show you spent at least that much on the Sudafed.

So it is not the act of purchasing using HSA funds that makes it taxable. It is using HSA funds that exceed your HSA qualified medical expenses.

 

[easysurfer]

But think about all the mental health the pizza snack provides ... .

I've declined getting a HSA card to avoid any mixing up. I prefer to use a regular credit card (plus the cash backs as a bonus) and figure out what is a qualified medical vs non-medical expense. Come to think of it, don't think I've ever had a receipt with mixed qualified and not.

Might just be me, but when I'm getting medical stuff, I don't have the desire for pizza.

 

[wmc1000]

We used ours to reimburse ourselves for Medicare part b premiums each year until the balance in the account was exhausted.

 

[marko]

We're talking about 12 bucks or so here, right?