Tax-Advantaged Accounts

If your spouse is the beneficiary, the HSA becomes theirs. Otherwise, the account ends and its value becomes taxable income to the person who inherits it.

es, once in your life. It’s called a Qualified HSA Funding Distribution and must go directly from an IRA to your HSA. It counts toward your annual limit.

Yes. The IRS limit includes all contributions—yours, your employer’s, and anyone else’s. Be sure to track the total to avoid excess contributions and penalties.

Yes. You can adjust your HSA contributions anytime during the year—even without a qualifying event. Just be sure you don’t exceed the annual limit.

Keep receipts as long as the HSA is open—plus at least three years. You may need them to prove your expenses were qualified if the IRS asks.

Yes. You can use HSA funds tax-free for dental care, eye exams, glasses, contacts, and even LASIK—as long as the expense is medically necessary.

Yes. As long as they’re your tax dependent, you can pay their medical expenses with your HSA—even if they’re on a different plan.

It’s taxable—and if you’re under 65, there’s a 20% penalty too. Some HSA providers allow you to fix the mistake if you catch it quickly.

Possibly not. These arrangements may count as disqualifying coverage if they provide care before the deductible is met or function like insurance.

Maybe. If you received non-preventive care from the VA in the last 3 months, you’re not eligible—unless the care was for a service-connected condition.

Yes, but the combined total must stay within the family limit. Each spouse must have their own HSA to make catch-up contributions after age 55.

Yes. HSA funds can pay for Medicare Parts B, D, and Advantage premiums tax-free—but not Medigap. You must be 65 or older to use this option.

Yes. After 65, you can use HSA funds for anything—medical or not. Non-medical withdrawals are taxable, but the 20% penalty no longer applies.

Yes. You can move funds between HSAs through a direct transfer or a 60-day rollover. Just don’t miss the deadline—or it could be taxable.

What kinds of investments can I make with my HSA funds?
Many HSA providers let you invest in mutual funds, ETFs, or index funds—offering tax-free growth when used for qualified medical expenses.

Yes. If you use HSA funds for non-medical expenses, the amount is taxable—and if you’re under 65, there’s a 20% penalty too.

You do. HSA withdrawals aren’t monitored in real time, so it’s your responsibility to keep records and make sure funds are used for qualified expenses.

Yes, as long as the expense happened after your HSA was opened and you kept documentation. There’s no time limit on when you must reimburse yourself.

Generally no, unless you’re paying for COBRA, Medicare, long-term care, or coverage while unemployed. Other premiums aren’t HSA-qualified and could trigger taxes and penalties.

HSA funds can cover qualified medical expenses—like doctor visits, prescriptions, dental and vision care—for you, your spouse, and your dependents, all tax-free.

Withdraw the excess (plus earnings) by the tax deadline to avoid a 6% penalty. If left in the account, the extra amount becomes taxable income.

You have until April 15 of the following year to contribute to your HSA for the previous tax year—even if you’re no longer HSA-eligible.

Your HSA limit is usually prorated by the number of eligible months—unless you’re eligible on December 1 and meet the last-month rule through the next year.

If you’re 55 or older, you can contribute an extra $1,000 to your HSA each year—just make sure you have your own account to do it.

In 2025, the limit is $4,300 for self-only and $8,550 for family coverage. Add $1,000 more if you’re age 55 or older.