Do I Pay Tax on HSA Money Not Used for 2017?

If you have a Health Savings Account (HSA) and are wondering about the tax implications of not using all the funds in 2017, read on to find out how it works.

Unused HSA funds from 2017 do not disappear at the end of the year. They roll over and remain in your account for future use. Here's what you need to know about taxes:

1. HSA contributions are tax-deductible, and the funds in your HSA grow tax-free.

2. You can use HSA funds tax-free for qualified medical expenses at any time, even if you don't use them all in the same year.

3. If you withdraw HSA funds for non-medical expenses before the age of 65, you will incur a 20% penalty and owe income tax on the amount withdrawn.

4. Once you turn 65, you can withdraw HSA funds for any reason without penalty, but you will owe income tax on the amount withdrawn if not used for qualified medical expenses.

In conclusion, you do not have to pay taxes on HSA funds that remain unused in 2017 as long as you use them for qualified medical expenses. Be sure to keep track of your receipts for tax purposes!

If you have leftover funds in your Health Savings Account (HSA) from 2017, don’t panic; these funds are not lost. In fact, HSA balances roll over year after year, allowing you to utilize them for qualified medical expenses in the future.