What Happens If I Don't Report HSA Spending? - Essential Guide

Health Savings Accounts (HSAs) offer a great way to save for medical expenses while enjoying tax benefits. However, it's crucial to understand the rules and guidelines for using your HSA funds. One common question that individuals may have is, 'What happens if I don't report HSA spending?'

When you contribute to an HSA, you must use the funds for qualified medical expenses to avoid taxes and penalties. If you don't report your HSA spending correctly, you could face consequences from the Internal Revenue Service (IRS).

Not reporting your HSA spending can lead to:

• IRS penalties and taxes
• An audit or investigation
• Loss of HSA tax benefits

It's essential to keep accurate records of your HSA transactions and only use the funds for eligible medical expenses. By staying organized and following the rules, you can maximize the benefits of your HSA while avoiding any potential issues with the IRS.

Your Health Savings Account (HSA) is a valuable tool, but it comes with responsibilities. Failing to report HSA spending accurately can not only result in penalties but can also put you in a tricky situation with the IRS.