What Happens If I Withdrew Money from My HSA After 2018?

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Post-2018 HSA withdrawals: penalties and taxes

If you withdrew money from your HSA after 2018, you may face penalties and taxes if the withdrawals are not used for qualified medical expenses. Here are some important things to keep in mind:

1. After 2018, any withdrawals not used for qualified medical expenses will be subject to income tax and a 20% penalty. 2. It is crucial to keep track of your expenses and only use HSA funds for medical purposes to avoid penalties. 3. If you are over 65, you can still withdraw funds for non-medical expenses without the 20% penalty, but you will need to pay income tax. 4. Make sure to consult with a tax professional or financial advisor to understand the implications of HSA withdrawals post-2018.

Withdrawing funds from your HSA post-2018 can come with penalties if not utilized for qualified medical expenses. It's essential to understand that any amounts not spent on approved medical costs will incur a 20% penalty alongside regular income tax, which can really add up.