Question

Is deducting medical expenses paid with an HSA allowed?

Answer

 

No, deducting medical expenses paid with an HSA is not allowed. If you use the health savings account (HSA) to pay your medical expenses then you do not get to itemize those medical deductions.

Medical expenses paid with an HSA account will cannot be applied toward the percentage of adjusted gross income (AGI) you must spend before you can make medical deductions. This is because your HSA money is pre-taxed.

Health Savings Account (HSA) is a medical savings account available to people enrolled in a high-deductible health plan. The money deposited into the HSA is not subject to federal income tax at the time of the deposit is made. Additionally, HSA funds will accumulate year-to-year if the money is not spent. HSA funds may be used to pay for qualified medical expenses at any time. Other benefits Health Savings Accounts:

  • You are eligible for a tax deduction for contributions you made to your HSA even if you do not itemize your deductions.
  • Contributions to made to your HSA by your employer may be excluded from your gross income.
  • The contributions remain in your account until you use them.
  • The interest earned on the account is tax-free. 

Related Topics

Related Resources

How Does Changing Jobs Affect Your Tax Return?

Changing jobs can come with tax implications like job search and moving expense deductions. Learn more about these potential benefits at H&R Block.

Is Volunteer Work Tax Deductible? | H&R Block

Spending your time volunteering is a great way to give back. Learn more about the tax benefits for volunteer work when filing your taxes at H&R Block.

Direct Sellers and Taxes – How Does it Work?

Many are surprised to learn that even side gigs come with a tax price. H&R Block Tax pro's have arranged expert tips for those who owe direct sales taxes.

What Is an Enrolled Agent or EA?

What does it mean to be an enrolled agent? Learn more about the roles and requirements of enrolled agent (EA) tax preparers at H&R Block.