Health Savings account withdrawal for expense that wasn’t covered. how do I file this on my taxes?
rorybellows asked:
Do I add this to my total income for the year? Someone please fill me in, I am trying to get a head start here thanks.
Freddy Kozlak
Do I add this to my total income for the year? Someone please fill me in, I am trying to get a head start here thanks.
Freddy Kozlak
What was the expense?
Let’s say you spent $500 of your HSA and $400 was for qualified items:
1040 form 8889, line 14a and 14c $500.
1040 fom 8889, line 15 $400
1040 form 8889, line 16 $100 (also goes on 1040 line 21 as income).
1040 form 8889, line 17 $10 (also goes on 1040 line 61 as penalty).
Just like everything to do with taxes, save your receipts. There is an area on your tax forms for medical deductions{Tax man will know exactly}. I know you have to pay a certain percentage in medical costs compared to your income before you can write it off.
Good luck
rorybellows,
You will get a 1099 from the trustee and will have to follow the instructions.
What are nonqualified withdrawals?
You can make withdrawals for purposes other than qualified medical expenses, but you should be aware that nonqualified withdrawals are taxed as regular income, and individuals under age 65 pay a 10% penalty on the amount of the non-qualified withdrawal.
Once you reach age 65, you can withdraw money from your HSA for any purpose and simply pay income taxes on the amount of the withdrawal. No additional penalties apply after age 65.
As far as family members are concerned, you can make qualified withdrawals for yourself or any of your dependents, even if those dependents are not covered as a dependent under your HDHP. When using funds from your HSA to pay for qualified medical expenses, federal income tax does not apply to those withdrawals and payments regardless of your age.