Timing between HSA contributions and withdrawals

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aw82
Posts: 114
Joined: Fri Oct 25, 2013 3:40 pm

Timing between HSA contributions and withdrawals

Post by aw82 »

We're one of those families that uses our HSA as needed, rather than saving for the distant future. Usually what I do is pay for expenses out of pocket and sometimes (but not always) withdraw a similar amount from my HSA. I do this so that I can earn points/miles/cashback on credit cards, but I never carry a balance. We're in a situation now where we have expenses exceeding our HSA balance. I'm thinking I should contribute cash in the amount of our expenses, so that I can deduct it next year, then withdraw it in order to reimburse myself.

My question is this: is there any problem with contributing an amount (say, $1k) and then as soon as the transaction posts, withdrawing the same $1k amount? From what I can tell this is kosher, but I haven't been able to find anything online discussing this "trick."
HouseStark
Posts: 324
Joined: Mon Oct 15, 2012 2:31 pm
Location: Minneapolis, MN

Re: Timing between HSA contributions and withdrawals

Post by HouseStark »

Assuming you have eligibility to contribute that amount to your HSA, there is no issue on timing of contribution and distribution for an expense incurred after you opened your HSA.
Topic Author
aw82
Posts: 114
Joined: Fri Oct 25, 2013 3:40 pm

Re: Timing between HSA contributions and withdrawals

Post by aw82 »

Great, thanks! Yeah, I can contribute up to $5350 (employer puts in $1200) for 2014.
DSInvestor
Posts: 11647
Joined: Sat Oct 04, 2008 11:42 am

Re: Timing between HSA contributions and withdrawals

Post by DSInvestor »

aw82 wrote:Great, thanks! Yeah, I can contribute up to $5350 (employer puts in $1200) for 2014.
There's still time to contribute for 2013 if you haven't maxed out. Deadline for 2013 HSA contributions is April 15, 2014 (tax filing deadline).
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