What Happens If I Take Money Out of HSA?

When you take money out of your HSA (Health Savings Account), there are certain implications to be aware of. Here's what happens:

1. You can use the funds for qualified medical expenses tax-free.

2. If you use the money for non-qualified expenses, you may face penalties and taxes.

3. If you're over 65, you can withdraw the funds for any reason without penalties, but you will pay income tax if not used for medical expenses.

When you withdraw money from your HSA (Health Savings Account), it’s crucial to fully understand the implications involved. Here’s what you need to consider:

1. The funds can be used for a broad range of qualified medical expenses, and you won’t incur any tax on this amount.

2. However, should you decide to use the money for non-qualified expenses, you risk facing not only penalties but also income taxes on the withdrawn amount.

3. Good news for those over 65! You can withdraw your funds for any purpose without incurring penalties, though income tax will apply if the funds aren't utilized for medical expenses.