Insurance Agent Forum

[al3]

You have an HSA account. You take out $300 to pay for new eye glasses or maybe a dental bill (because you don't have vision or dental ins.)

When you do your federal taxes can you still enter the $300 for the item under Sched. A "medical expenses" even though you paid for it with pre-tax money?

Client asked today and I didn't know what to tell her... but that I'd go to the experts and find out.

Thanks,
Al

[somarco]

Start here.

She can enter it on her Schedule A if she wants to but it probably wont hit 7% of her AGI.

It actually goes on form 8889.

[al3]

Originally Posted by somarco

Start here.

She can enter it on her Schedule A if she wants to but it probably wont hit 7% of her AGI.

It actually goes on form 8889.

8889 is only to report contributions. I don't see anywhere that says you can't deduct the cost of a medical expenditure paid for by HSA dollars.

If client's AGI is low, and she had a high deduct and/or a lot of not covered expenses (such as dental or out of network costs, or non-covered meds) she might get some tax relief. Say she works as a cashier and makes $30,000 a year her AGI might be around 25,000 and 7% of that is 1750.... and she had 2300 in med bills (her deductible plus dental, vision) she would get a bit of tax relief.

I think the 7% threshold is way too high. It should be zero.

Al

[somarco]

Line 12 of 8889 is for disbursements.

She can't deduct the cost of medical items if they are reimbursed by the HSA. The only reason for looking for a deduction would be if her expenses exceeded her HSA allowance and she needed a write off on Schedule A against income.

I think the 7% threshold is way too high. It should be zero.

Talk to your congressman.

Most folks with $30k in income pay little or no taxes anyway.

[al3]

Originally Posted by somarco

Line 12 of 8889 is for disbursements.

She can't deduct the cost of medical items if they are reimbursed by the HSA.

I'm looking for the tax regulation that says the above. She is not being reimbursed. It is HER money from her own HSA (assuming that it did not come from her employer). She put the money in and she takes it out.

Maybe there is a tax ruling or regulation that says medical expenses paid for with HSA funds can't be deducted, but I've not found it.

Al