What Happens If You Don't Include HSA on Taxes?

For many people, Health Savings Accounts (HSAs) are a valuable tool for managing healthcare costs. However, not everyone is clear on the tax implications of HSAs. If you fail to include your HSA on your taxes, there can be consequences that you should be aware of.

When you neglect to report your HSA contributions on your tax return, you may face penalties from the IRS. The contributions made to your HSA are generally tax-deductible, so omitting them from your taxes could result in underreporting your income.

Furthermore, if you use HSA funds for non-qualified expenses and don't include that on your taxes, those withdrawals could be considered taxable income subject to additional penalties.

It's important to ensure that you properly report all HSA contributions and withdrawals on your taxes to avoid any issues with the IRS.

Health Savings Accounts (HSAs) provide individuals with a tax-advantaged way to save for medical expenses. Failing to include your HSA on your taxes can lead to unexpected penalties from the IRS. It's critical to remember that HSA contributions can lower your taxable income, so missing this on your tax return may result in financial repercussions.