HSA
I plan to itemize my Medical Expenses this year (they exceed the 7.5% AGI floor). Can I be reimbursed from my HSA for the Medical Expenses that are below the 7.5% AGI floor since they are not technically being “deducted” (i.e. I am receiving no tax benefit for the Medical Expenses that are below the 7.5% AGI floor -effectively, they are being “disallowed”).
For example, if your total Medical Expenses are $12,000 but you can only deduct $2,000 (amount in excess of 7.5% of AGI), can you reimburse yourself from your HSA for the $10,000 difference that is below the 7.5% of AGI?
Permalink Submitted by William Tuttle on Tue, 2021-03-02 18:27
The 7.5% floor on Line 3 is subtracted after you have taken the deduction.
!Caution from Schedule A Instructions: “If you received a distribution from a health savings account or a medical savings account in 2020, see Pub. 969 to figure your deduction.”
!Caution from IRS Publication 969: “You can’t deduct qualified medical expenses as an itemized deduction on Schedule A (Form 1040) that are equal to the tax-free distribution from your HSA.”