![]() Q1: Is the cost of a dental exam a medical expense that can be paid or reimbursed by an HSA, FSA, Archer MSA, or HRA? (added March 17, 2023)Ī1: Yes, because the dental exam provides a diagnosis of whether a disease or illness is present. ![]() For more information about HSAs, FSAs, Archer MSAs, and HRAs, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans PDF. They don't include expenses that are merely beneficial to general health.įor more information about whether costs related to nutrition, wellness, and general health are medical expenses under section 213 of the Code, see Publication 502, Medical and Dental Expenses PDF and Tax Topic 502, Medical and Dental Expenses. Medical expenses must be primarily to alleviate or prevent a physical or mental disability or illness. They also include the costs of medicines and drugs that are prescribed by a physician. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes. ![]() These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body. However, if any amount is paid or reimbursed under an HSA, FSA, Archer MSA, or HRA, a taxpayer cannot also deduct the amount as a medical expense on the taxpayer's federal income tax return. Expenses for medical care under section 213 of the Code also are eligible to be paid or reimbursed under an HSA, FSA, Archer MSA, or HRA. Section 213 of the Code generally allows a deduction for expenses paid during the taxable year for medical care if certain requirements are met. The following table shows the minimum deductible amounts for 2019 to 2023.These frequently asked questions (FAQs) address whether certain costs related to nutrition, wellness, and general health are medical expenses under section 213 of the Internal Revenue Code (Code) that may be paid or reimbursed under a health savings account (HSA), health flexible spending arrangement (FSA), Archer medical savings account (Archer MSA), or health reimbursement arrangement (HRA). Again, thanks to higher inflation, these amounts are quite a bit higher than the 2022 figures – $1,400 for self-only coverage and $2,800 for family coverage. ![]() For 2023, the health plan must have a deductible of at least $1,500 for self-only coverage or $3,000 for family coverage. To contribute to an HSA, you must be covered under a high deductible health plan. You can avoid the additional tax if you withdraw (1) the excess contributions from your HSA by the due date (including extensions) of your federal income tax return for the year the contributions were made, and (2) any income earned on the withdrawn contributions and include it as income on your tax return for the year you withdraw the contributions and earnings. If you contribute too much to an HSA (including any contributions from your employer), not only will you lose the tax benefits for the excess amount, but you might also have to pay a 6% excise tax on the overage each year the excess contribution remains in your account.įortunately, there's a way around the 6% penalty if you go over the applicable contribution limit. If you or your health plan are not in compliance with the restrictions in place for any particular year, then you can say goodbye to the HSA tax savings for that year. They apply to the amount you can contribute to an HSA for the year, the minimum deductible for your health insurance plan, and your annual out-of-pocket expenses. ![]() All-in-all, HSAs can be a great tool for covering your health care costs.īut there are a handful of limitations and requirements that you need to know about, and they're adjusted annually for inflation. You can also hold on to the account when you're no longer working for your current employer and use it tax-free for medical expenses at a different job or even during retirement. There's an "above-the-line" deduction available for contributions to an HSA, money put in an HSA by your employer is excluded from gross income, earnings are tax free, and there's no tax on distributions if you use the funds to pay qualified medical expenses. For many people, HSAs offer a tax-friendly way to pay medical bills. After doing a little research, you might discover that an HSA is the way to go. If your employer offers a health savings account option as part of its benefits package, don't dismiss it out of hand just because you're not familiar with how they work. Savvy Strategies for Your Health Savings Account ![]()
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