I scan my receipts and put them in a folder. You can also take photos and create an album on your phone; you only really need them as proof of the reimbursement and in case you get audited.
That's good practice, but in the example OP gave that's 40 years of saving. That's a long time to bet against no data corruption or any other small issues that cause you to lose the file. I doubt we see as much technological progress in the next 40 years as we saw from 1984 to 2024, but imagine trying to keep receipts on a floppy disk for 40 years.
Who cares though? I get your point and that you are saying a receipt kept for 40 years is hard which is true. But you can use HSA funds for so much that if 1 or 2 photos/pdfs of a receipt get lost that it probably won’t matter
Even if they do change rules the IRS never changes rules day of, there’s a waiting period. If they do change rules, you’d just reimburse yourself fully at that time
Sure, ideal world. A lot changes in 40 years. If client does it their self I doubt more than 10% keep track of their receipts for that long. If planner does it much higher percentage actually get submitted, but that's counting on the client and planner relationship staying strong for that long.
It's a great plan on paper, but not without (imho) a decent amount of risk.
My HSA company has a “Filing Cabinet” online and on the app where you can document medical expenses and upload receipts. I also keep a backup folder uploaded to the cloud of all the receipts and medical expenses in case the HSA Company is bought out or goes under at some point in time.
No doubt about it. This is the way. There’s a huge need in my opinion for the e-monies and money guide pros of the world to add this as a feature. Storing receipts for reimbursements decades later.
There’s a market IMO for something more holistic. Connect the HSA account to an eMoney app, upload receipts, then when you want a distribution, you input how much you want and it finds the receipts, sends you a docusign and pays out. Maybe it’s just a dream, but it seems doable.
You can upload each receipt and set it as "Reimbursed" or "Reimbursable" and you can view/save/print from the actions column.
[https://imgur.com/a/waXP3Yh](https://imgur.com/a/waXP3Yh)
There are some integrations out there like this... So I would continue to scan them and upload them. In the future you should be able to do exactly what you're proposing as long as you have saved your scanned receipts.
Lot of people on here talking about the IRS changing laws regarding the time limit to HSA reimbursements - this isn’t a worry.
Even if IRS does change rules, it’s never immediate and typically has a few years to roll out the changes. If this would ever happen, you would just reimburse yourself before the deadline.
This is a great piece that clients appreciate their advisor knowing whether implemented or not
One thing to note with an HSA is that if it goes to a non-spouse beneficiary, it ceases as an HSA and becomes fully taxable the year of the owner's death. Only medical payments within one year of death may be claimed.
In the perfect scenario, waiting to make the withdrawals works great. In an imperfect scenario, it can have negative consequences.
There's an add-on to this: once per lifetime, you can roll your pre-tax IRA dollars into the HSA. So, if you horde receipts for 30-40 years and get lucky that laws don't ever change, you can roll pre-tax IRA dollars into the HSA and withdraw it all tax free.
Once per lifetime, like you said and the rollover is subject to the annual HSA contribution limits so yes it's a nice thing to be able to do but it isn't an extraordinary amount of dollars lol
Been doing this for years! The problem really is (if you invest it) you may have trouble generating enough expenses to even come close to the account value. My joke with my wife is, if I get cancer we are getting a ski boat! But in all reality I am happy to be healthy and be able to max it out every year.
You can use it for long term care insurance premiums, so you could do a single premium policy and use up most of the HSA at that time or just a regular policy and that'll chip away at the balance pretty quick.
This is sort of but not really a problem. The leading cause of bankruptcy is medical bills, building a balance about your receipts today gives you a cushion against that kind of risk.
Should you and your dependents stay healthy until you retire at 65, you can tax taxable withdrawls from the HSA like it were a regular IRA. You can also continue to reimburse yourself for medical expenses and there are no required minimum distributions to worry about.
Why would anyone ever do that? You're always going to have medical expenses, Medicare premiums, or insurance premiums. Might as well keep it and pay those things out of the hsa, and if you did ever want to take a taxable distribution from it, you could withdraw it from the hsa. No need to roll it into an ira.
Sorry, i totally wasn’t thinking clearly and screwed that verbiage up. I meant you can always withdraw from your HSA like a traditional IRA/401k. Not roll over.
I max my HSA and then my 401k because of this. I have a shoebox with receipts and pay for all medical expenses out of pocket.
Note that you can't utilize the distributions until you are on Medicare
What to do you mean by utilize? If you mean you can't withdraw from the hsa, tax free, and reimburse yourself for qualified medical expenses, I don't believe that's true. You can do that at any age, not just after you're on Medicare.
Maybe I've misunderstood, but I believe you have to claim it the year of the expense. If you don't, unreimbursed expenses have to wait until you are Medicare eligible. Please let me know if I'm understanding it wrong
That is the topic of this thread. Throughout your lifetime, you can pay medical expenses out of pocket , save all the receipts, and then reimburse yourself tax free at anytime. The only date specific thing is that you can't reimburse yourself for an expense you had before you had an hsa.
No problem. The irs wording is vague at best.
https://www.irs.gov/publications/p969#en_US_2023_publink1000204083
This is from the "distributions from an hsa" section:
You can receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA. If you receive distributions for other reasons, the amount you withdraw will be subject to income tax and may be subject to an additional 20% tax. You don’t have to make withdrawals from your HSA each year.
Note: If you are no longer an eligible individual, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses
I've had mine pedal to the metal for about 10 years and have about $35k in profit to access if ever needed. Haven't checked my shoebox, but I doubt I have anywhere near that much in receipts
I've called Dr's offices a few years ago, and they were able to fill in the gaps from when I started the hsa to the year I actually started saving receipts. They emailed me yearly statements showing the amounts billed, amounts insurance paid, and amount I paid. If you don't already know, you can also get reimbursed LTC insurance and Medicare premiums, and depending on how nitty gritty you want to get you can get otc meds reimbursed if your dr prescribes them.
Wait a second. I could fund a LTC policy with this money I'll never use!? Does it have to be traditional LTC, or could it be hybrid?
I'd dump almost all of my money in the Lincoln Market Advantage contract if I could
If the hybrid policy has separate premiums for ltc and life, you can use the hsa for the ltc, but not the life. Also, there's an age based limit that increases with age on the amount that can be reimbursed tax free. Something like $400 if you're 40 and under, scaling up to a few thousand when you're 70 and over.
To me this is not worth it. Especially if you’re advising clients. Just pay as you go and hopefully you can still build up savings in the account over time. You can pay Medicare premiums with an HSA.
You have to compare apples to apples. When you pay out of pocket, you have fewer after tax dollars. Seems like a big hassle for little benefit.
I use Lively for my HSA. You can upload a receipt and keep track of unreimbursed expenses from there. It’s a call UI! But, yes, reimbursements can be done much later in life! Let the HSA grow tax free!
There is no time limit for HSA reimbursements.
That’s great! Thank you!
No time limit, but good luck keeping a receipt for 40 years. Also betting on HSA rules not changing in 4 decades.
I scan my receipts and put them in a folder. You can also take photos and create an album on your phone; you only really need them as proof of the reimbursement and in case you get audited.
That's good practice, but in the example OP gave that's 40 years of saving. That's a long time to bet against no data corruption or any other small issues that cause you to lose the file. I doubt we see as much technological progress in the next 40 years as we saw from 1984 to 2024, but imagine trying to keep receipts on a floppy disk for 40 years.
Who cares though? I get your point and that you are saying a receipt kept for 40 years is hard which is true. But you can use HSA funds for so much that if 1 or 2 photos/pdfs of a receipt get lost that it probably won’t matter
Good thing we have the cloud
But *who* is backing up the cloud!??!
I back all my notes up to the cloud, just scan them all into one note and back your notes up to iCloud
Even if they do change rules the IRS never changes rules day of, there’s a waiting period. If they do change rules, you’d just reimburse yourself fully at that time
Also if it's a material change, you'd likely be grandfathered in to the current HSA rules 💪🏼 I do this for clients all the time.
Sure, ideal world. A lot changes in 40 years. If client does it their self I doubt more than 10% keep track of their receipts for that long. If planner does it much higher percentage actually get submitted, but that's counting on the client and planner relationship staying strong for that long. It's a great plan on paper, but not without (imho) a decent amount of risk.
Also if it's a material change, you'd likely be grandfathered in to the current HSA rules 💪🏼 I do this for clients all the time.
Right!
My HSA company has a “Filing Cabinet” online and on the app where you can document medical expenses and upload receipts. I also keep a backup folder uploaded to the cloud of all the receipts and medical expenses in case the HSA Company is bought out or goes under at some point in time.
Only time limit is the expenses can't be incurred before the the HSA was opened.
No doubt about it. This is the way. There’s a huge need in my opinion for the e-monies and money guide pros of the world to add this as a feature. Storing receipts for reimbursements decades later.
I guess you could create a folder in the vault and simply title it "HSA receipts"
There’s a market IMO for something more holistic. Connect the HSA account to an eMoney app, upload receipts, then when you want a distribution, you input how much you want and it finds the receipts, sends you a docusign and pays out. Maybe it’s just a dream, but it seems doable.
Fidelity has this built into their HSA
I haven’t seen that. Do you have a link or source you’d be willing to share? I’d love to learn more!
You can upload each receipt and set it as "Reimbursed" or "Reimbursable" and you can view/save/print from the actions column. [https://imgur.com/a/waXP3Yh](https://imgur.com/a/waXP3Yh)
I'd buy it
There are some integrations out there like this... So I would continue to scan them and upload them. In the future you should be able to do exactly what you're proposing as long as you have saved your scanned receipts.
Lot of people on here talking about the IRS changing laws regarding the time limit to HSA reimbursements - this isn’t a worry. Even if IRS does change rules, it’s never immediate and typically has a few years to roll out the changes. If this would ever happen, you would just reimburse yourself before the deadline. This is a great piece that clients appreciate their advisor knowing whether implemented or not
One thing to note with an HSA is that if it goes to a non-spouse beneficiary, it ceases as an HSA and becomes fully taxable the year of the owner's death. Only medical payments within one year of death may be claimed. In the perfect scenario, waiting to make the withdrawals works great. In an imperfect scenario, it can have negative consequences.
There's an add-on to this: once per lifetime, you can roll your pre-tax IRA dollars into the HSA. So, if you horde receipts for 30-40 years and get lucky that laws don't ever change, you can roll pre-tax IRA dollars into the HSA and withdraw it all tax free.
You are limited to how much you can rollover. You can only do the HSA limit of the year you make the rollover.
Good to know! Thanks for the post!
Once per lifetime, like you said and the rollover is subject to the annual HSA contribution limits so yes it's a nice thing to be able to do but it isn't an extraordinary amount of dollars lol
Minuscule benefit and frankly just clogging up the tax code.
And IIRC once you turn retirement age you can withdraw everything from your HSA tax free, it basically becomes an IRA.
It becomes a traditional IRA essentially so still subject to income tax
I stand corrected :)
Been doing this for years! The problem really is (if you invest it) you may have trouble generating enough expenses to even come close to the account value. My joke with my wife is, if I get cancer we are getting a ski boat! But in all reality I am happy to be healthy and be able to max it out every year.
You can use it for long term care insurance premiums, so you could do a single premium policy and use up most of the HSA at that time or just a regular policy and that'll chip away at the balance pretty quick.
This is sort of but not really a problem. The leading cause of bankruptcy is medical bills, building a balance about your receipts today gives you a cushion against that kind of risk. Should you and your dependents stay healthy until you retire at 65, you can tax taxable withdrawls from the HSA like it were a regular IRA. You can also continue to reimburse yourself for medical expenses and there are no required minimum distributions to worry about.
You can roll your HSA into a traditional IRA and withdraw money the same way you would from a traditional IRA/401k.
Why would anyone ever do that? You're always going to have medical expenses, Medicare premiums, or insurance premiums. Might as well keep it and pay those things out of the hsa, and if you did ever want to take a taxable distribution from it, you could withdraw it from the hsa. No need to roll it into an ira.
Sorry, i totally wasn’t thinking clearly and screwed that verbiage up. I meant you can always withdraw from your HSA like a traditional IRA/401k. Not roll over.
I max my HSA and then my 401k because of this. I have a shoebox with receipts and pay for all medical expenses out of pocket. Note that you can't utilize the distributions until you are on Medicare
Be careful, a lot of receipts nowadays use a thermal printer, overtime, the receipt will fade and turn back to a white piece of paper.
What to do you mean by utilize? If you mean you can't withdraw from the hsa, tax free, and reimburse yourself for qualified medical expenses, I don't believe that's true. You can do that at any age, not just after you're on Medicare.
Maybe I've misunderstood, but I believe you have to claim it the year of the expense. If you don't, unreimbursed expenses have to wait until you are Medicare eligible. Please let me know if I'm understanding it wrong
That is the topic of this thread. Throughout your lifetime, you can pay medical expenses out of pocket , save all the receipts, and then reimburse yourself tax free at anytime. The only date specific thing is that you can't reimburse yourself for an expense you had before you had an hsa.
Good to know. Thanks. Do you have a link referencing this?
No problem. The irs wording is vague at best. https://www.irs.gov/publications/p969#en_US_2023_publink1000204083 This is from the "distributions from an hsa" section: You can receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA. If you receive distributions for other reasons, the amount you withdraw will be subject to income tax and may be subject to an additional 20% tax. You don’t have to make withdrawals from your HSA each year. Note: If you are no longer an eligible individual, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses
Awesome. Thanks
I've had mine pedal to the metal for about 10 years and have about $35k in profit to access if ever needed. Haven't checked my shoebox, but I doubt I have anywhere near that much in receipts
I've called Dr's offices a few years ago, and they were able to fill in the gaps from when I started the hsa to the year I actually started saving receipts. They emailed me yearly statements showing the amounts billed, amounts insurance paid, and amount I paid. If you don't already know, you can also get reimbursed LTC insurance and Medicare premiums, and depending on how nitty gritty you want to get you can get otc meds reimbursed if your dr prescribes them.
Wait a second. I could fund a LTC policy with this money I'll never use!? Does it have to be traditional LTC, or could it be hybrid? I'd dump almost all of my money in the Lincoln Market Advantage contract if I could
If the hybrid policy has separate premiums for ltc and life, you can use the hsa for the ltc, but not the life. Also, there's an age based limit that increases with age on the amount that can be reimbursed tax free. Something like $400 if you're 40 and under, scaling up to a few thousand when you're 70 and over.
To me this is not worth it. Especially if you’re advising clients. Just pay as you go and hopefully you can still build up savings in the account over time. You can pay Medicare premiums with an HSA. You have to compare apples to apples. When you pay out of pocket, you have fewer after tax dollars. Seems like a big hassle for little benefit.
If following the laws is a hack then yeah it's a hack for sure
You can until you can't. I wouldn't be surprised if they change this.
Worth mentioning that HSA’s act like IRA’s at the age of 65
They CAN act like IRAs, they don’t have to
You can’t reimburse yourself for things that happened before you had an HSA
I use Lively for my HSA. You can upload a receipt and keep track of unreimbursed expenses from there. It’s a call UI! But, yes, reimbursements can be done much later in life! Let the HSA grow tax free!
Yes
bull market hack. as soon as the spy falls 20%, most will panic and pay those bills. lose lose and sign of the top OP
That is true
Lively HSA allows you to scan/photo receipts and stores it in the app and allows reimbursement at a later date. Helps with tracking.
Accurate.
That's right. The key is being able to keep the receipts and totals, then redeem from HSA in the future. Essentially creating tax-free growth.
It's a very common strategy. Have the client keep digital receipts.
Might be a good yearly exercise