Hi all,
This is my first year with an HSA and I am a little confused about what I can and can't deduct, and when.
1. On the 1099-SA, Turbo Tax wants me to list the distributions from my HSA. This does not have any affect on my taxes so long as I check the box that they were all used for qualified medical expenses, right? This part is only to track expenses that were NOT for qualified medical purchases so that they can tax me at this point, correct? These distributions were all made with my HSA debit card (I did not use my checking acct and then ask for reimbursement).
2. When you use the HSA debit card, will it let you buy ANYTHING, even if it's not a QME? Am I supposed to save ALL receipts for ALL medical purchases, even if I use this card? I had assumed the card's transaction history would keep track of that for me (and I have never tried to use it for any non-medical expenses).
3. I am not sure what to put in this form:
Contributions from Box 12 on your W-2 $0
Employer contributions made in 2014 for tax year 2013 ?
Employer contributions made in 2015 for tax year 2014 ?
Other Employer Contributions not Reported on a W-2 $1000?
All Other Contributions (i.e. contributions not made by your employer or with payroll deductions) $480?
My W-2 only lists 12a: BB (my Roth 403b contributions) and 12b: DD (My employer's payments towards the entire health plan). I'm not sure what I am supposed to enter in the above form, but I do know that my employer contributed $1000 to my HSA for me, and I contributed $480, so is that right? I can't deduct the employer's contributions, but I can deduct mine, right? What are the other boxes for ("employer contributions made in 2014 for tax year 2013, employer contributions made in 2015 for tax year 2014")? When would I know to enter anything into those boxes, would it be listed specifically on my W-2?
3. If I DID buy something without my HSA debit card and have NOT asked for reimbursement yet (some prescriptions, an urgent clinic visit, etc.) do I list those on the Itemized Deduction Medical Expenses area? I assume that I can't list them there and then ALSO request reimbursement from the HSA later, as that is considered "double-dipping," correct? What is the best thing to do in this instance? Do you always ask for reimbursement, or do you itemize? I live in Oregon and last year my State taxes were best with the Itemized deductions, but my Federal was better off with the Standard deduction. The medical expenses I had itemized helped a lot on the State return. I guess I'm just confused about where and when to itemize, or choose reimbursement from the HSA, or if I can do both?
4. I see that some people on this forum never take money out of their HSAs and always pay medical expenses with other money (and save their receipts). Is that just to keep the HSA as an "emergency fund"? I'm confused about whether I should actually USE my HSA or just leave it alone...what is the best way to make the most of this account? Can you still be reimbursed from the HSA years later if you have the receipts?
5. I just opened my Traditional IRA with Vanguard. I've contributed $3000 so far for 2014, but I plan to top it off to $5500 before I file my taxes. Where do I enter this amount in order to decrease my taxable income? Do I just subtract that amount from my Total Income? Is it Line 32 on the 1040 form?
I think that's it for now. :)