HSA and record retention

How long should I keep information on HSA like deposits, payments for services, etc.?

Reply to
Kurt V. Ullman
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I have been waiting for the wisdom of this group as well.

I would say seven years from the date of HSA distributions for payments for services.

And if that zeroed out the deposits, ditto. If not, keep those records for seven years until they are zeroed out.

But I am only guessing.

Reply to
Taxed and Spent

The reason is that, unfortunately there is no perfect rule on this.

The basic statute of limitations is three years either from when the tax return was filed or when it was due, whichever is later.

However if there was an understatement of income of more than 25%, the statute of limitations is six years. That's where the seven-year rule of thumb comes from.

However if a court decides that a return is fraudulent or there was a wilful attempt to evade taxes, there is no statute of limitations at all. Which means they could come after you even many years later.

while they just lose track of old returns because they are dealing with newer ones. So it is highly unlikely that any prosecution would happen after six years, though it could.

Reply to
Stuart O. Bronstein

----- [Supplemental response to those already posted.]

"Forever" if you have an unreimbursed but HSA-reimbursable medical expense.

Why "forever?" Because the unreimbursed expense can reduce the amount recognized as taxable when a non-spouse heir inherits the account, just like the expenses paid up to 1 year after death do.

Reply to
D. Stussy

If the IRS thinks there was fraud (and if a court agrees) then no statute of limitations applies, either. So forever is technically the best answer, however unrealistic it may be.

Reply to
Stuart O. Bronstein

Thanks for those who replied, it was very interesting and as helpful as any tax suggestions can be (grin). Late getting back because I was using the HSA over the last two weeks to reattach a retina.

Reply to
Kurt V. Ullman

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