Keeping track of receipts for HSA reimbursement - what do I need?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
vel
Posts: 43
Joined: Fri Jul 05, 2019 12:22 pm

Keeping track of receipts for HSA reimbursement - what do I need?

Post by vel »

Hi, I will be using my HSA for investing and plan to pay out of pocket for medical expenses. For reimbursement later, what exactly do I need to be archiving? For example, if an ER visit, do I save the invoice or do I need to save proof of my payment of that invoice? Are digital photos of the documents adequate or do I need the hard copies?
corp_sharecropper
Posts: 590
Joined: Thu Nov 07, 2013 1:36 pm

Re: Keeping track of receipts for HSA reimbursement - what do I need?

Post by corp_sharecropper »

I just snap a photo with my phone, save it to the cloud, and throw the physical thing away at the nearest trash receptacle.

Some bogleheads probably laminate theirs, make an engraved copy in unobtainium alloy, and store each along with notarized/witnessed affidavit in separate defcon 3 nuclear hardened vaults in remote locations just in case the IRS bogeyman has it out just for them

The choice is yours
runner3081
Posts: 5994
Joined: Mon Aug 22, 2016 3:22 pm

Re: Keeping track of receipts for HSA reimbursement - what do I need?

Post by runner3081 »

corp_sharecropper wrote: Mon Jun 14, 2021 10:19 pm Some bogleheads probably laminate theirs, make an engraved copy in unobtainium alloy, and store each along with notarized/witnessed affidavit in separate defcon 3 nuclear hardened vaults in remote locations just in case the IRS bogeyman has it out just for them

The choice is yours
:)

3 copies for me.

1) Paper at home
2) Scan on personal computer
3) Backed up on Google Drive

As for the question posed by the OP, I always keep the payment receipt and/or bill that showed amount due that was paid.
Duzz78
Posts: 158
Joined: Sat May 15, 2021 9:10 pm

Re: Keeping track of receipts for HSA reimbursement - what do I need?

Post by Duzz78 »

To get reimbursed from your HSA account, you just need your either the paper or digital copy of the bill/invoice from the provider. You can store those how you choose. Digital is fine.

vel wrote: Mon Jun 14, 2021 10:01 pm do I need to save proof of my payment of that invoice?
If you are needing to prove to the IRS that your reimbursement was legitimate, then for record keeping you must keep records sufficient to show that according to IRS Publication 969:
• The distributions were exclusively to pay or reimburse qualified medical expenses,
• The qualified medical expenses hadn’t been previously paid or reimbursed from another source, and
• The medical expenses hadn’t been taken as an itemized deduction in any year.

What the IRS may require to meet those 3 criteria
could be simple (you reimbursed yourself $4K) you might need bank statement, credit card bill, canceled check, the provider bill/invoice
could be extensive (you reimbursed yourself $30K) could mean not only the above showing you use non tax deferred funds, but also the same for all the months from the date the expense incurred to the date of the IRS audit. Plus the provider bills. The burden of proof is on you to prove the expense.

Note I have not taken a distribution from my HSA account in over a decade. I do not keep receipts. I do not plan to reimburse myself for past expenses. I do not see keeping a $55 doctor bill for 2+ years. Yeah, kinda defeats one purpose for having the account. When I choose to start, I will just use my HSA credit card to pay at the time service is rendered. By then, I anticipate my medical bills will be many and I need to start to use the funds up.
User avatar
Harry Livermore
Posts: 1937
Joined: Thu Apr 04, 2019 5:32 am

Re: Keeping track of receipts for HSA reimbursement - what do I need?

Post by Harry Livermore »

My wife's school district tried the HDHP/ HSA model for a few years. I think from 2017-2019?
We made a spreadsheet that detailed patient, doctor, procedure, date, charge, etc. The receipts went into the same folder that EOB statements and doctor's and CVS receipts go into. Banker's box with all of that year's receipts, tucked into the hall of records. If the IRS came a-callin' I would just have to open the appropriate year, pull out the folder, and make copies. Print out the spreadsheet and presto.
Cheers
AnEngineer
Posts: 2414
Joined: Sat Jun 27, 2020 4:05 pm

Re: Keeping track of receipts for HSA reimbursement - what do I need?

Post by AnEngineer »

There are three parts to your question:
1) what documents do you need to keep?
2) how to store them?
3) how to organize and summarize (e.g. summary spreadsheet)

2&3 are basically preference (and understanding that receipt paper becomes illegible).
Duzz78 wrote: Tue Jun 15, 2021 12:35 am you just need your either the paper or digital copy of the bill/invoice from the provider.
...
I think this is clearly insufficient.
If you are needing to prove to the IRS that your reimbursement was legitimate, then for record keeping you must keep records sufficient to show that according to IRS Publication 969:
• The distributions were exclusively to pay or reimburse qualified medical expenses,
...
There are two aspects to this part:
-it's a valid medical expense
-you paid it

Often EOB plus CC statement (or annual summary) are often suggested as sufficient. A bill from a provider unlikely has both pieces of information. I've gotten some that have neither.
AnEngineer
Posts: 2414
Joined: Sat Jun 27, 2020 4:05 pm

Re: Keeping track of receipts for HSA reimbursement - what do I need?

Post by AnEngineer »

Also, there's the question of what you'll need to provide to the IRS.

When making a withdrawal: nothing

If IRS asks about said withdrawal: probably just a summary document as indicated by posters who've had this happen

If push comes to shove: everything in pub 969 quoted by Duzz78.
User avatar
Nate79
Posts: 9373
Joined: Thu Aug 11, 2016 6:24 pm
Location: Delaware

Re: Keeping track of receipts for HSA reimbursement - what do I need?

Post by Nate79 »

Note there is nothing special about reimbursing with the HSA in the year of the medical expense or waiting later in terms of what you need to document. So think about that, do you think all the millions of people out there using their HSA credit card to pay for medical expenses day in day out are keeping extensive records? So even thinking about this you are ahead of the masses.

Like others I just keep an itemized receipt, scan it to my computer and upload to the cloud as backup, make a spreadsheet tracking each expense noting the date it was paid, who it's for, amount, and was it reimbursed or not. I keep the physical copies in a folder. I have a copy of the first date my HSA was opened.

That's it.
Duzz78
Posts: 158
Joined: Sat May 15, 2021 9:10 pm

Re: Keeping track of receipts for HSA reimbursement - what do I need?

Post by Duzz78 »

AnEngineer wrote: Tue Jun 15, 2021 6:58 am There are three parts to your question:
1) what documents do you need to keep?
2) how to store them?
3) how to organize and summarize (e.g. summary spreadsheet)

2&3 are basically preference (and understanding that receipt paper becomes illegible).
Duzz78 wrote: Tue Jun 15, 2021 12:35 am you just need your either the paper or digital copy of the bill/invoice from the provider.
...
Vel clearly asked what he needed for reimbursement. Reimbursement in a later year. Whether Vel reimburses a medical expense 30 days later or 3 years later, the documentation needed is still the same. And that is the bill/invoice, paper or digital, from the provider. He is getting reimbursed from his HSA account. He did not ask what he needed to prove that reimbursement.
AnEngineer
Posts: 2414
Joined: Sat Jun 27, 2020 4:05 pm

Re: Keeping track of receipts for HSA reimbursement - what do I need?

Post by AnEngineer »

Duzz78 wrote: Tue Jun 15, 2021 12:46 pm Vel clearly asked what he needed for reimbursement. Reimbursement in a later year. Whether Vel reimburses a medical expense 30 days later or 3 years later, the documentation needed is still the same. And that is the bill/invoice, paper or digital, from the provider. He is getting reimbursed from his HSA account. He did not ask what he needed to prove that reimbursement.
In a pedantic sense, yes, Vel asked about what's needed for reimbursement. However, narrowly answering that question would be misleading (and doesn't match your own earlier response).

More importantly, you're wrong: to get reimbursed you don't need any documentation (as I mentioned upthread).

If there exists an HSA provider that does add extra hoops to jump through, I advise you to dump said provider to someone more cooperative.
ChicagoC
Posts: 50
Joined: Sun Jul 28, 2019 12:49 pm

Re: Keeping track of receipts for HSA reimbursement - what do I need?

Post by ChicagoC »

AnEngineer wrote: Tue Jun 15, 2021 2:41 pm
Duzz78 wrote: Tue Jun 15, 2021 12:46 pm Vel clearly asked what he needed for reimbursement. Reimbursement in a later year. Whether Vel reimburses a medical expense 30 days later or 3 years later, the documentation needed is still the same. And that is the bill/invoice, paper or digital, from the provider. He is getting reimbursed from his HSA account. He did not ask what he needed to prove that reimbursement.
In a pedantic sense, yes, Vel asked about what's needed for reimbursement. However, narrowly answering that question would be misleading (and doesn't match your own earlier response).

More importantly, you're wrong: to get reimbursed you don't need any documentation (as I mentioned upthread).

If there exists an HSA provider that does add extra hoops to jump through, I advise you to dump said provider to someone more cooperative.
While you may not need documentation to get reimbursed, you need documentation in case of an audit. My guess is you have a lot higher likelihood of an audit if you withdraw a big chunk covering 20 years of medical expenses vs one year of expenses. Plus if you are withdrawing in year, it would be a lot easier to obtain documentation. In 20 years, this will be a lot harder unless you have been diligent to save documentation.

I have been saving my EOBs, invoices, proof of payment and credit card statements, but haven’t thought about how I would prove I wasn’t reimbursed from another source for that expense 20 years after the fact. I have been using $100 as a threshold to go through the effort of saving the documentation but withdrawing for expenses below. I think I am going to stop withdrawing for an expenses so at least I can show I didn’t talk distributions from my HSA.
corp_sharecropper
Posts: 590
Joined: Thu Nov 07, 2013 1:36 pm

Re: Keeping track of receipts for HSA reimbursement - what do I need?

Post by corp_sharecropper »

corp_sharecropper wrote: Mon Jun 14, 2021 10:19 pm Some bogleheads probably laminate theirs, make an engraved copy in unobtainium alloy, and store each along with notarized/witnessed affidavit in separate defcon 3 nuclear hardened vaults in remote locations just in case the IRS bogeyman has it out just for them

The choice is yours
I rest my case, OP. Just leave it to Bogleheads to have a debate over the legal number of angels allowed to dance on a pin.

Don't let this be too complicated, make a digital copy (phone camera is my preference as it is the easiest to do right when you get the invoice/receipt) and maybe save a cc/bank statement if you feel it's necessary. Believe it or not, but the IRS isn't actually out to punish people for doing regular, lawful, things. It's absurd to concern yourself any further than simple common sense basic documentation.
Post Reply