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After age 65, you can use your HSA funds for non-medical expenses. You won’t be penalized for it, but the withdrawal will be taxed as general income. How To Report Your HSA Contributions
After you turn 65, you can also withdraw money tax-free from the HSA to pay premiums for Medicare Part B, Part D and Medicare Advantage (but not Medigap) coverage.
Plus, if you take a distribution after age 65, you won’t have to pay taxes on the total amount withdrawn. If maxing out your HSA is not in the cards for you, you can select a different amount.
Health savings accounts were created in 2003 as part of the Medicare Prescription Drug, Improvement, and Modernization Act. ... You can withdraw HSA money tax-free for any reason after turning 65.
If you're in the 22% tax bracket, $8,550 of HSA contributions would reduce your 2025 federal income taxes by about $1,880. And if you're nearing retirement, keep in mind that you can put even more ...
An HSA lets you save money on a tax-advantaged basis for healthcare expenses but once you turn 65, you can withdraw money from it for any reason without a tax penalty. You would, however, pay ...
These expenses may only be deducted, however, to the extent they exceed 10% (7.5 % for 65 and over) of a taxpayer's AGI. [1] Accordingly, a taxpayer would only be entitled to deduct the amount by which these expenses exceed 10% of $100,000, or $10,000 with an adjusted gross income of $100,000 and medical expenses of $11,000.
Contributions are tax-deductible, and the money can be invested within the HSA and grow tax-free. ... However, the 20 percent penalty for non-medical expenses does not apply after age 65.