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Reimbursing mileage for HSA

Posted: Tue Sep 15, 2020 2:24 pm
by B4Xt3r
Hi,

I've got a quick question. According to IRS pub 502 2019 (https://www.irs.gov/pub/irs-pdf/p502.pdf), it would seem that mileage is reimbursable at the medical mileage rate of 0.2 $/mile according to page 14.

My question is what kind of "proof" or "receipts" should be kept to to substantiate a claim? It's a bit hard to prove that I drove somewhere years after the fact.

Thanks,

-b4xt3r

Re: Reimbursing mileage for HSA

Posted: Tue Sep 15, 2020 2:35 pm
by FIREchief
Home address and provider address is all I track. Mileage from google maps. I can’t imagine the IRS expecting anything more. 8-)

IRS rate may change each year. It’s 17 cents per mile for 2020.

Re: Reimbursing mileage for HSA

Posted: Tue Sep 15, 2020 2:48 pm
by B4Xt3r
FIREchief wrote: Tue Sep 15, 2020 2:35 pm Home address and provider address is all I track. Mileage from google maps. I can’t imagine the IRS expecting anything more. 8-)

IRS rate may change each year. It’s 17 cents per mile for 2020.
Interesting. So which mileage rate matters? I presume it would be the year its claimed not the year it actually happened.

Re: Reimbursing mileage for HSA

Posted: Tue Sep 15, 2020 2:53 pm
by flyfishers83
Wife and I had significant out of pocket expenses a couple of years ago and drove 6,000 miles back and forth to dr. appointments (one of the benefits of living a couple of hours from a major city). I have a spreadsheet with all of the dates, which dr. and the mileage. I don't know that I'll ever pursue reimbursement, but I have it available.

Re: Reimbursing mileage for HSA

Posted: Tue Sep 15, 2020 2:59 pm
by FiveK
B4Xt3r wrote: Tue Sep 15, 2020 2:48 pm
FIREchief wrote: Tue Sep 15, 2020 2:35 pm Home address and provider address is all I track. Mileage from google maps. I can’t imagine the IRS expecting anything more. 8-)

IRS rate may change each year. It’s 17 cents per mile for 2020.
Interesting. So which mileage rate matters? I presume it would be the year its claimed not the year it actually happened.
We're both speculating but "the year it actually happened" seems more likely. By analogy, it's the cost of the doctor's visit or prescription in the year you paid it, not what the doctor or pharmacist would charge years later.

Re: Reimbursing mileage for HSA

Posted: Tue Sep 15, 2020 3:12 pm
by terran
Super interesting. I never would have thought to claim mileage for doctors appointments for HSA reimbursement.
B4Xt3r wrote: Tue Sep 15, 2020 2:48 pm
FIREchief wrote: Tue Sep 15, 2020 2:35 pm Home address and provider address is all I track. Mileage from google maps. I can’t imagine the IRS expecting anything more. 8-)

IRS rate may change each year. It’s 17 cents per mile for 2020.
Interesting. So which mileage rate matters? I presume it would be the year its claimed not the year it actually happened.
I would think the opposite: mileage rates are supposed to be based on the cost to operate a vehicle in the year the rate applies to, so I would track the total cost (mileage times that year's rate) as that would reflect the vehicle operating cost for the trip you took.

Re: Reimbursing mileage for HSA

Posted: Tue Sep 15, 2020 3:19 pm
by Lee_WSP
B4Xt3r wrote: Tue Sep 15, 2020 2:48 pm
FIREchief wrote: Tue Sep 15, 2020 2:35 pm Home address and provider address is all I track. Mileage from google maps. I can’t imagine the IRS expecting anything more. 8-)

IRS rate may change each year. It’s 17 cents per mile for 2020.
Interesting. So which mileage rate matters? I presume it would be the year its claimed not the year it actually happened.
I can't speak to HSA reimbursement, but I cannot see why it would be any different from business or personal (unreimbursed work) mileage deductions.

They are reported in the tax year they occurred and the rate is the tax year they occurred. Right now, we have 2019 rates (so people can file their taxes) and 2020 rates (just published in January or so (so people can forecast)). Either way, you keep a log of the date, purpose, and the miles driven. You then deduct it on Schedule C.

I'd just keep a log along with the receipt for the procedure. If you don't know the actual miles, google maps your home to the provider and back.

edit:
BUT, the publication says you can only
You can include in medical expenses amounts paid for transportation primarily for, and essential to, medical care.
Transportation to and from a provider in your car, for yourself is not included. The examples given are:
You can include:
• Bus, taxi, train, or plane fares or ambulance service;
• Transportation expenses of a parent who must go with
a child who needs medical care;
• Transportation expenses of a nurse or other person
who can give injections, medications, or other treatment required by a patient who is traveling to get medical care and is unable to travel alone; and
• Transportation expenses for regular visits to see a
mentally ill dependent, if these visits are recommended as a part of treatment.

Re: Reimbursing mileage for HSA

Posted: Tue Sep 15, 2020 3:45 pm
by Artful Dodger
Lee_WSP wrote: Tue Sep 15, 2020 3:19 pm
edit:
BUT, the publication says you can only
You can include in medical expenses amounts paid for transportation primarily for, and essential to, medical care.
Transportation to and from a provider in your car, for yourself is not included. The examples given are:
You can include:
• Bus, taxi, train, or plane fares or ambulance service;
• Transportation expenses of a parent who must go with
a child who needs medical care;
• Transportation expenses of a nurse or other person
who can give injections, medications, or other treatment required by a patient who is traveling to get medical care and is unable to travel alone; and
• Transportation expenses for regular visits to see a
mentally ill dependent, if these visits are recommended as a part of treatment.
Based on what I read in pub 502, transportation expense in your car is included. You can use either actual costs or the standard mileage rate, and add in actual parking fees and tolls.

Car expenses. You can include out-of-pocket expenses, such as the cost of gas and oil, when you use a car for medical reasons. You can't include depreciation, insurance, general repair, or maintenance expenses. If you don't want to use your actual expenses for 2019, you can use the standard medical mileage rate of 20 cents a mile.

You can also include parking fees and tolls. You can add these fees and tolls to your medical expenses whether you use actual expenses or the standard mileage rate.

Example. In 2019, Bill Jones drove 2,800 miles for medical reasons. He spent $400 for gas, $30 for oil, and $100 for tolls and parking. He wants to figure the amount he can include in medical expenses both ways to see which gives him the greater deduction. He figures the actual expenses first. He adds the $400 for gas, the $30 for oil, and the $100 for tolls and parking for a total of $530.

He then figures the standard mileage amount. He multiplies 2,800 miles by 20 cents a mile for a total of $560. He then adds the $100 tolls and parking for a total of $660. Bill includes the $660 of car expenses with his other medical expenses for the year because the $660 is more than the $530 he figured using actual expenses.

Transportation expenses you can't include. You can't include in medical expenses the cost of transportation in
the following situations.
• Going to and from work, even if your condition requires an unusual means of transportation.
• Travel for purely personal reasons to another city for an operation or other medical care.
• Travel that is merely for the general improvement of one's health.
• The costs of operating a specially equipped car for other than medical reasons.

Re: Reimbursing mileage for HSA

Posted: Wed Sep 16, 2020 1:12 am
by FIREchief
B4Xt3r wrote: Tue Sep 15, 2020 2:48 pm
FIREchief wrote: Tue Sep 15, 2020 2:35 pm Home address and provider address is all I track. Mileage from google maps. I can’t imagine the IRS expecting anything more. 8-)

IRS rate may change each year. It’s 17 cents per mile for 2020.
Interesting. So which mileage rate matters? I presume it would be the year its claimed not the year it actually happened.
No. It's the year that the expense occurred.

Re: Reimbursing mileage for HSA

Posted: Wed Sep 16, 2020 8:14 am
by B4Xt3r
FIREchief wrote: Wed Sep 16, 2020 1:12 am
B4Xt3r wrote: Tue Sep 15, 2020 2:48 pm
FIREchief wrote: Tue Sep 15, 2020 2:35 pm Home address and provider address is all I track. Mileage from google maps. I can’t imagine the IRS expecting anything more. 8-)

IRS rate may change each year. It’s 17 cents per mile for 2020.
Interesting. So which mileage rate matters? I presume it would be the year its claimed not the year it actually happened.
No. It's the year that the expense occurred.
Mind explaining why? (It is not obvious to me yet.)

Re: Reimbursing mileage for HSA

Posted: Wed Sep 16, 2020 8:31 am
by MrJedi
You paid out of pocket for the mileage in 2020, this was your non reimbursed expense in 2020. If you reimburse yourself 30 years later, I would expect the rate in 2020 to be in effect.

Just like if you had an out of pocket expense of $1000 in 2020. If you reimburse yourself in 2050, that amount is still $1000, not what the equivalent cost would be in 2050.

Re: Reimbursing mileage for HSA

Posted: Wed Sep 16, 2020 8:32 am
by terran
B4Xt3r wrote: Wed Sep 16, 2020 8:14 am
FIREchief wrote: Wed Sep 16, 2020 1:12 am
B4Xt3r wrote: Tue Sep 15, 2020 2:48 pm
FIREchief wrote: Tue Sep 15, 2020 2:35 pm Home address and provider address is all I track. Mileage from google maps. I can’t imagine the IRS expecting anything more. 8-)

IRS rate may change each year. It’s 17 cents per mile for 2020.
Interesting. So which mileage rate matters? I presume it would be the year its claimed not the year it actually happened.
No. It's the year that the expense occurred.
Mind explaining why? (It is not obvious to me yet.)
Say you bought bandaids 5 years ago. Would you claim reimbursement for the amount you bought them for or for what they sell for now? Why would mileage be any different?

Re: Reimbursing mileage for HSA

Posted: Wed Sep 16, 2020 10:48 am
by Nate79
I don't mess with mileage tracking for future HSA reimbursement. This is just too much hassle for something that might have to be dealt with during an audit 30 years from now.

Re: Reimbursing mileage for HSA

Posted: Wed Sep 16, 2020 11:07 am
by Lee_WSP
MrJedi wrote: Wed Sep 16, 2020 8:31 am You paid out of pocket for the mileage in 2020, this was your non reimbursed expense in 2020. If you reimburse yourself 30 years later, I would expect the rate in 2020 to be in effect.

Just like if you had an out of pocket expense of $1000 in 2020. If you reimburse yourself in 2050, that amount is still $1000, not what the equivalent cost would be in 2050.
Wait, an HSA allows for reimbursements in prior years? I did not know that.

Re: Reimbursing mileage for HSA

Posted: Wed Sep 16, 2020 11:27 am
by MrJedi
Lee_WSP wrote: Wed Sep 16, 2020 11:07 am
MrJedi wrote: Wed Sep 16, 2020 8:31 am You paid out of pocket for the mileage in 2020, this was your non reimbursed expense in 2020. If you reimburse yourself 30 years later, I would expect the rate in 2020 to be in effect.

Just like if you had an out of pocket expense of $1000 in 2020. If you reimburse yourself in 2050, that amount is still $1000, not what the equivalent cost would be in 2050.
Wait, an HSA allows for reimbursements in prior years? I did not know that.
Yes, as long as the HSA was established at the time of the expense.

Some people opt for a strategy of paying out of pocket and allowing HSA funds to continue growing tax free instead. And then as needed in the future, reimburse yourself with the past receipt. Obviously there is more bookkeeping involved but it's a way to preserve tax advantaged space if you are otherwise maxing everything else out.

Re: Reimbursing mileage for HSA

Posted: Wed Sep 16, 2020 11:57 am
by michaeljc70
Nate79 wrote: Wed Sep 16, 2020 10:48 am I don't mess with mileage tracking for future HSA reimbursement. This is just too much hassle for something that might have to be dealt with during an audit 30 years from now.
+1. I expect I'll have plenty of healthcare expenses when I am 65+ and not need to worry about mileage. I also don't track my current prescriptions since the cost is probably like <$200 per year.

Re: Reimbursing mileage for HSA

Posted: Wed Sep 16, 2020 2:30 pm
by FIREchief
B4Xt3r wrote: Wed Sep 16, 2020 8:14 am
FIREchief wrote: Wed Sep 16, 2020 1:12 am
B4Xt3r wrote: Tue Sep 15, 2020 2:48 pm
FIREchief wrote: Tue Sep 15, 2020 2:35 pm Home address and provider address is all I track. Mileage from google maps. I can’t imagine the IRS expecting anything more. 8-)

IRS rate may change each year. It’s 17 cents per mile for 2020.
Interesting. So which mileage rate matters? I presume it would be the year its claimed not the year it actually happened.
No. It's the year that the expense occurred.
Mind explaining why? (It is not obvious to me yet.)
If you don't like the answers you're receiving here, I suggest you call the IRS and ask them. Let us know what they say. 8-)

Re: Reimbursing mileage for HSA

Posted: Wed Sep 16, 2020 4:55 pm
by Jablean
B4Xt3r wrote: Wed Sep 16, 2020 8:14 am
FIREchief wrote: Wed Sep 16, 2020 1:12 am
B4Xt3r wrote: Tue Sep 15, 2020 2:48 pm
FIREchief wrote: Tue Sep 15, 2020 2:35 pm Home address and provider address is all I track. Mileage from google maps. I can’t imagine the IRS expecting anything more. 8-)

IRS rate may change each year. It’s 17 cents per mile for 2020.
Interesting. So which mileage rate matters? I presume it would be the year its claimed not the year it actually happened.
No. It's the year that the expense occurred.
Mind explaining why? (It is not obvious to me yet.)
Just like if you have a medical bill in 2020 for $100 that you paid with your on-hand money and then decided in 2030 to reimburse yourself out of your HSA you would not adjust that $100 amount by inflation. For travel you should write yourself your own receipt for 2020 with the allowed 2020 amount and include that receipt with your other 2020 medical bills and treat it the same when you reimburse from the HSA.

Re: Reimbursing mileage for HSA

Posted: Wed Sep 16, 2020 4:58 pm
by Jablean
MrJedi wrote: Wed Sep 16, 2020 11:27 am
Lee_WSP wrote: Wed Sep 16, 2020 11:07 am
MrJedi wrote: Wed Sep 16, 2020 8:31 am You paid out of pocket for the mileage in 2020, this was your non reimbursed expense in 2020. If you reimburse yourself 30 years later, I would expect the rate in 2020 to be in effect.

Just like if you had an out of pocket expense of $1000 in 2020. If you reimburse yourself in 2050, that amount is still $1000, not what the equivalent cost would be in 2050.
Wait, an HSA allows for reimbursements in prior years? I did not know that.
Yes, as long as the HSA was established at the time of the expense.

Some people opt for a strategy of paying out of pocket and allowing HSA funds to continue growing tax free instead. And then as needed in the future, reimburse yourself with the past receipt. Obviously there is more bookkeeping involved but it's a way to preserve tax advantaged space if you are otherwise maxing everything else out.
And because of how they are treated during inheritance and with no RMDs ever required you can kind of look at them along with your Roth bucket - or even better than a Roth bucket because they reduced your taxes now.

Re: Reimbursing mileage for HSA

Posted: Wed Sep 16, 2020 9:33 pm
by terran
Jablean wrote: Wed Sep 16, 2020 4:58 pm And because of how they are treated during inheritance and with no RMDs ever required you can kind of look at them along with your Roth bucket - or even better than a Roth bucket because they reduced your taxes now.
They're actually pretty bad for inheritance because unless the inheritor is a spouse they're taxable immediately unlike IRAs with have be withdrawn over 10 years for those who die in 2020 or later.

Re: Reimbursing mileage for HSA

Posted: Thu Sep 17, 2020 1:04 pm
by bacon4retirement
FIREchief wrote: Tue Sep 15, 2020 2:35 pm Home address and provider address is all I track. Mileage from google maps. I can’t imagine the IRS expecting anything more. 8-)
Several years ago I had a trip reimbursement package rejected by an employer because my receipts included a Google Maps printouts showing how I calculated the mileage. The accountant said the IRS required logs rather than calculations. No idea if the accountant was actually correct, or if the IRS has update rules since this occurred.

Re: Reimbursing mileage for HSA

Posted: Thu Sep 17, 2020 1:21 pm
by FIREchief
bacon4retirement wrote: Thu Sep 17, 2020 1:04 pm
FIREchief wrote: Tue Sep 15, 2020 2:35 pm Home address and provider address is all I track. Mileage from google maps. I can’t imagine the IRS expecting anything more. 8-)
Several years ago I had a trip reimbursement package rejected by an employer because my receipts included a Google Maps printouts showing how I calculated the mileage. The accountant said the IRS required logs rather than calculations. No idea if the accountant was actually correct, or if the IRS has update rules since this occurred.
So did you just transfer the Google Maps info to the proper log sheet format?

This is apples and oranges. I believe that my former Megacorp also required certain formats for expensing in order to comply with whatever they felt the IRS required for business expense documentation. We're talking about personal income tax returns. If I have an EOB/invoice/receipt from Dr. Jones at 100 Main Street, and my tax return indicates my address as 200 Main Street, I highly doubt that the IRS would question my claiming of the driving distance between the two as a qualified expense. I would certainly like to hear from anybody who has been challenged by the IRS in such a situation. I've never read anything of the sort here on the forum (or elsewhere). Also, to clarify, I track the mileage using information from Google Maps. I don't keep a Google Maps printout in my records. The distance between two addresses will only change if roads are added/eliminated/modified. I'm not too worried about that.

Re: Reimbursing mileage for HSA

Posted: Thu Sep 17, 2020 1:22 pm
by FIREchief
terran wrote: Wed Sep 16, 2020 9:33 pm
Jablean wrote: Wed Sep 16, 2020 4:58 pm And because of how they are treated during inheritance and with no RMDs ever required you can kind of look at them along with your Roth bucket - or even better than a Roth bucket because they reduced your taxes now.
They're actually pretty bad for inheritance because unless the inheritor is a spouse they're taxable immediately unlike IRAs with have be withdrawn over 10 years for those who die in 2020 or later.
^^^this. The only "bad" time to have money in an HSA vs. a tIRA is when a person dies without a surviving spouse.

Re: Reimbursing mileage for HSA

Posted: Thu Sep 17, 2020 2:05 pm
by Lee_WSP
bacon4retirement wrote: Thu Sep 17, 2020 1:04 pm
FIREchief wrote: Tue Sep 15, 2020 2:35 pm Home address and provider address is all I track. Mileage from google maps. I can’t imagine the IRS expecting anything more. 8-)
Several years ago I had a trip reimbursement package rejected by an employer because my receipts included a Google Maps printouts showing how I calculated the mileage. The accountant said the IRS required logs rather than calculations. No idea if the accountant was actually correct, or if the IRS has update rules since this occurred.
That is correct, the IRS website says mileage log, but you just take the mileage you calculated, add dates, add the business purpose and you've created a one line log.

Re: Reimbursing mileage for HSA

Posted: Thu Sep 17, 2020 4:24 pm
by bacon4retirement
FIREchief wrote: Thu Sep 17, 2020 1:21 pm
bacon4retirement wrote: Thu Sep 17, 2020 1:04 pm
FIREchief wrote: Tue Sep 15, 2020 2:35 pm Home address and provider address is all I track. Mileage from google maps. I can’t imagine the IRS expecting anything more. 8-)
Several years ago I had a trip reimbursement package rejected by an employer because my receipts included a Google Maps printouts showing how I calculated the mileage. The accountant said the IRS required logs rather than calculations. No idea if the accountant was actually correct, or if the IRS has update rules since this occurred.
So did you just transfer the Google Maps info to the proper log sheet format?

This is apples and oranges. I believe that my former Megacorp also required certain formats for expensing in order to comply with whatever they felt the IRS required for business expense documentation. We're talking about personal income tax returns. If I have an EOB/invoice/receipt from Dr. Jones at 100 Main Street, and my tax return indicates my address as 200 Main Street, I highly doubt that the IRS would question my claiming of the driving distance between the two as a qualified expense. I would certainly like to hear from anybody who has been challenged by the IRS in such a situation. I've never read anything of the sort here on the forum (or elsewhere). Also, to clarify, I track the mileage using information from Google Maps. I don't keep a Google Maps printout in my records. The distance between two addresses will only change if roads are added/eliminated/modified. I'm not too worried about that.
Using the Google Maps distance without the map printed out seemed like the least bad option in my case. The EIC requires small business owners to take all possible deductions, so would be an even larger violation not to submit the mileage. The distance I drive to the airport actually varies by multiple miles depending on where traffic jams occur. The normal highway route in Google maps is somewhat physically longer than the surface street route more commonly used at rush hour.

I realize that an employer policy from several years ago could differ from IRS regulations. After doing some more searching, my understanding is that publication 463 provides guidance for both business and personal mileage deductions without differentiating a less onerous process for personal tax returns. Publication 463 specifically shows an example log showing starting and ending odometer readings.

For a easier read than Pub 463, Motley Fool also indicates odometer readings are required:
https://www.fool.com/knowledge-center/i ... ments.aspx

Re: Reimbursing mileage for HSA

Posted: Thu Sep 17, 2020 4:46 pm
by FIREchief
bacon4retirement wrote: Thu Sep 17, 2020 4:24 pm I realize that an employer policy from several years ago could differ from IRS regulations. After doing some more searching, my understanding is that publication 463 provides guidance for both business and personal mileage deductions without differentiating a less onerous process for personal tax returns. Publication 463 specifically shows an example log showing starting and ending odometer readings.

For a easier read than Pub 463, Motley Fool also indicates odometer readings are required:
https://www.fool.com/knowledge-center/i ... ments.aspx
That's funny. I didn't read the entire pub, but did see the following:
If you don’t have complete records to prove an element of an expense, then you must prove the element with:
• Your own written or oral statement containing specific information about the element,
and
• Other supporting evidence that is sufficient to establish the element.
I would think that beginning address, ending address and mileage from Google would be "sufficient to establish the element." That example with odometer start/stop may pre-date the internet. :P

Re: Reimbursing mileage for HSA

Posted: Thu Sep 17, 2020 11:23 pm
by Lee_WSP
bacon4retirement wrote: Thu Sep 17, 2020 4:24 pm
I realize that an employer policy from several years ago could differ from IRS regulations. After doing some more searching, my understanding is that publication 463 provides guidance for both business and personal mileage deductions without differentiating a less onerous process for personal tax returns. Publication 463 specifically shows an example log showing starting and ending odometer readings.

For a easier read than Pub 463, Motley Fool also indicates odometer readings are required:
https://www.fool.com/knowledge-center/i ... ments.aspx
The Pub says in table 5-1 that the following needs to be recorded:


Amount
Cost of each separate
expense. For car
expenses, the cost of
the car and any
improvements, the date
you started using it for
business, the mileage
for each business use
,
and the total miles for
the year.
Time (date)

Place or description

And the business purpose

Even in the example you cite the key column is "miles this trip" which is calculated by subtracting the stopping and starting odometer reading. Table 5-2 is only an example of a log, not what is required.