You do. Unlike a Flexible Spending Account (FSA) or Health Reimbursement Arrangement (HRA), an HSA puts the responsibility on you, the account holder, to make sure your withdrawals are used for qualified medical expenses.
There’s no claims process or required pre-approval—you can spend HSA funds freely. But that also means you’re responsible for keeping receipts and documentation in case the IRS ever audits your tax return.
🧾 What You Should Keep:
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Receipts or explanations of benefits (EOBs)
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Dates of service and proof of payment
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Description of the medical service or product
You don’t need to submit these to your HSA provider—but you should store them in case you need to prove that the expense was qualified.
🧠 What Happens If You Use Funds Improperly?
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The amount becomes taxable income
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You may owe a 20% penalty if you’re under age 65
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No penalty applies if you’re 65+—but non-medical withdrawals are still taxable