Can I use my health savings account for anything?


Can I use my health savings account for anything?

Unused HSA funds roll over year to year; there is no “use it or lose it” penalty. Funds that are rolled over continue to grow and earnings are tax free. At age 65, you will have the ability to use your HSA funds for any purpose on a taxable basis. This makes funding your HSA a great way to save for retirement.

Can I use my health savings account for groceries?

The card itself may have restrictions on where you can spend—and on what. For example, your card might not work if you try to use it at a supermarket or convenience store. If you can’t run a transaction using your HSA card, you will have to submit your expenses for reimbursement after the fact.

Can I cash in my health savings account?

Yes, you can withdraw funds from your HSA at any time. But please keep in mind that if you use your HSA funds for any reason other than to pay for a qualified medical expense, those funds will be taxed as ordinary income, and the IRS will impose a 20% penalty.

What items can I purchase with my health savings account?

In addition to doctor bills, hospital stays and prescription drugs, HSAs can also pay for the following items, which might surprise you:

  • Over-the-counter medications.
  • Menstrual products.
  • Alternative treatments.
  • Travel for health care.
  • Dental and vision care.
  • Guide dogs.
  • Some insurance premiums.
  • Medicare costs.

What happens to HSA funds not used?

HSA money is yours to keep. Unlike a flexible spending account (FSA), unused money in your HSA isn’t forfeited at the end of the year; it continues to grow, tax-deferred.

Can I buy shampoo with HSA?

While some exceptions may vary, shampoo is generally not eligible for reimbursement with a flexible spending account (FSA), health savings account (HSA), health reimbursement arrangement (HRA), limited-purpose flexible spending account (LPFSA) or a dependent care flexible spending account (DCFSA).

Do I need to keep receipts for my HSA?

The IRS requires that you keep receipts for all your Health Savings Account (HSA) spending. HSA distributions (money taken from an HSA account) are nontaxable, but only when the money is used to pay for qualified medical expenses.

Does IRS check HSA distributions?