IRS HSA Eligible Expenses

The Health Savings Accounts are a great way to reduce your federal income tax bill as the money contributed to these accounts isn’t taxed. When the time for distribution comes due to healthcare payments, you won’t be taxed also if the medical expenses qualify under the IRS rules.

Added with the fact that you can qualify for a tax deduction of up to $3,650 as an individual and $7,300 for family coverage, the HSA is such a great way to save tax while taking care of your health care costs.

Unlike the qualifying expenses deduction which you are required to itemize, you can deduct the health savings account contributions even if you take the standard deduction. This is because the HSA deduction isn’t exactly a deduction as it’s rather seen as an adjustment to income. That’s why you’ll claim it using Schedule 1.

Medical expenses that are not taxed for HSA eligible expenses per IRS guidelines are as follows.

Abortion
Acid reducers

Acne laser procedures
Acne treatment
Acupuncture

Allergy and sinus prescriptions
Ambulance expenses and emergency care
Anti-allergy medications

Artificial limbs
Birth control pills, shots, and devices, such as the IUDs
Blood pressure monitors

Blue-light glasses
Body scans
Breast pumps and lactation supplies

Breast reconstruction surgery after cancer
Breathing slips
Canes, sticks, and walkers

Childbirth classes for the expecting mother
Childbirth expenses, such as care from a midwife or obstetrician
Chiropractic treatment

Contact lenses and saline solution
Cough, flu, and cold medications
Crutches

Dental care, including cleanings, sealants, fluoride treatments, X-rays, fillings, braces, extractions, and dentures
Diabetes education, including nutrition counseling
Diabetes supplies, such as blood sugar test kits and insulin

Egg donor expenses related to infertility treatment
Eye drops
Eye exams

Eye surgery, including laser surgery
Eyeglasses, including prescription and reading glasses, and prescription sunglasses
Feminine hygiene products, such as pads, tampons, and menstrual cups

First-aid kits
Flu shots
Food, grooming, and veterinary care for guide dogs

Guide dogs to assist with disabilities
Hearing aids and batteries
Heartburn medications

Hospital expenses for both inpatient and outpatient services
Infertility treatment, including in vitro fertilization; egg, sperm, and embryo storage; fertility monitors; and sperm washing
Inpatient drug and alcohol treatment

Insect repellant and anti-itch creams
Insulin
Lab fees

Laxatives
Lip treatments for cold and canker sores
Long-term-care premiums, up to a qualifying amount based on your age

Medical alert bracelets
Medical records fees
Medicare premiums if you’re 65 or older, excluding Medicare supplemental policies

Medicated shampoos and soaps
Nasal sprays
Nightguards to treat teeth grinding

Nursing care, whether provided in your home or a nursing home
Occupational therapy
Oxygen and oxygen equipment

Pain relievers
Physical exams
Physical therapy

Prescription medications
Psychiatrist care
Psychologist care

Skin creams and ointments, including cleansers, toners, and moisturizers
Sleep aids
Smoking-cessation programs and drugs, including nicotine patches and gums

Speech therapy
Sunscreen and OTC remedies o treat the effects of sun exposure
Surgery, excluding elective cosmetic surgery

Thermometers
Tubal ligation and tubal ligation reversal
Ultrasounds

Vaccines
Vasectomy (male sterilization) and vasectomy reversal
Wheelchairs

X-rays

How to claim the benefits of HSA eligible expenses?

In order to reap the advantages of the health savings account, you need to have one first, and contribute money to the account regularly. The benefits of an HSA may not be as apparent as other ways to pay for health care. It wouldn’t be fair to the HSA to think that it’s not logical to contribute and save money through it. In the long run, you’ll be letting your savings grow tax-free, and use it to pay healthcare expenses without paying a single cent in taxes on the distributions.

Since you won’t pay any tax and assuming you have enough balance on your account, you will cover your expenses related to health that are eligible and pay the healthcare expenses. Since you won’t pay tax on your contributions to the HSA and you won’t get tax when taking out the distributions, it’s a double-edged sword that gets in the way of taxes while allowing you to provide better care for yourself and your loved ones.