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I paid for my eligible health expenses from my regular account at the end of 2014 and beginning of 2015 because I did not have enough money on my HSA account.

Now that I realize that I can contribute to my HSA for 2014 until April 15 of 2015, I want to report my expenses on pre-tax basis as if they were paid from the HSA.

Can I do that or funds have to be deposited to HSA account before they can be used ?

If not, can I deposit funds to HSA and then withdraw exact amount that I want to report on pre-tax basis after 3 days or so ?

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Yes, you will need to deposit the funds into your HSA, then withdraw them to reimburse yourself for the expenses.

The tax deduction comes when you contribute (deposit) to your HSA. If you do not deposit the money there, you will not be able to claim the deduction. Your HSA provider reports the amount of your contributions to the IRS, so the amount you say you contribute to your HSA on your tax return has to match what your HSA provider reports.

When you deposit the money to your HSA, you need to explicitly tell your provider that the contribution is for tax year 2014. The reason is that you want to make sure that they report the amount of your 2014 contributions to the IRS correctly.

After you've deposited the amount into your HSA, you can withdraw it to reimburse yourself for an eligible medical expense. In order to be eligible, it needs to be an expense that was incurred while you had the HSA in place. If you had your HSA account in place before you paid the expense, no problem. But if you set up the HSA account after you paid for the expense, you might be out of luck.

The distribution (withdrawal) will be a part of tax year 2015, and you'll see this amount included as part of the gross distributions on your 1099-SA form next year.

When I first set up my HSA, I didn't have any extra money to fund the HSA, so I handled it just like you are talking about. I would wait until I had a medical bill, then deposit the amount I needed into my HSA and withdraw it back out to pay the bill.

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  • What about medical bills that I paid in 2014 ? Will they still have to go into 2015 tax year ?
    – alpav
    Commented Mar 3, 2015 at 16:25
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    @alpav On your taxes, reporting the contributions (deposits) is separate from reporting the distributions (withdrawals). The contribution will be in tax year 2014, and can be deducted from your 2014 income on the tax return you file this year on form 8889.
    – Ben Miller
    Commented Mar 3, 2015 at 16:43
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    @alpav The withdrawal happens in the year you withdraw the money. You are allowed to reimburse yourself for medical expenses you incurred in prior years, as long as you had the HSA in place when you incurred the expense. So yes, if you paid the medical bill in 2014, and withdraw the money now to reimburse yourself for it, the withdrawal will be included in next year's 1099-SA for inclusion in your 2015 tax return's form 8889.
    – Ben Miller
    Commented Mar 3, 2015 at 16:44
  • So suppose your employer for whatever reason doesn't direct your pre-tax HSA funds to your HSA account, but co-mingles it with your regular pay. You still have to transfer it to the HSA account yourself, because the numbers your employer reports and the numbers the HSA custodian reports need to match?
    – user12515
    Commented Dec 30, 2015 at 4:40
  • @Michael, that sounds like a new question. Feel free to ask it, but please include more details, because I'm not sure what you are asking.
    – Ben Miller
    Commented Dec 30, 2015 at 4:43

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