Uisng an HSA abroad

A qualified medical expense can be incurred anywhere. Therefore, if your expenses in Australia meet the definition of being qualified medical expense, your home free.

I don't see why not. My usual recommendation is to wait until after the end of the year to reimburse for expenses, just in case you have enough medical expenses to be able to itemize them. If you reimburse on the fly, that doesn't become an option. There's nothing wrong to waiting a few to many years for the reimbursement, allowing you to have the HSA build up free of tax on earnings in the meantime.

Tom Healy

Sure. Last year I used my HSA debit card to pay for new lenses for my glasses in the UK.

Remember that to have an HSA you must also have a compatible high deductible insurance policy. If you live in a country like Australia where they have reasonable health care, wouldn't the US insurance policy be redundant?

R's, John

HSA account in the US, but I live mostly

How do you do the currency difference? If I buy meds for $100 Australian dollars, what do I put down for my US deduction? The spot at closing that day. The bid ask at some Forex dealer? Do I use a blended annual average? The swings have been violent in recent years, like as much as 30 percent, which is why I ask.

The problem overseas, though, may be more in getting the appropriate high deductible policy. Not all pay their part outside the US, so the OP will have to be careful in that respect.

Assuming you get the debit card on an American bank (to the others would that be a requirement for HSA???), then it would make any currency changes when it hits the account.

HSA account in the US, but I live mostly

If you pay by debit or credit card held on a US bank, you would use whatever shows up as US dollars on your bill. If you pay by cash or a card drawn onan Australian bank, then take the amount of the charge and convert it to US dollars at the FX rate on the date of purchase.

I've used:

opening an HSA account in the US, but I live mostly

Since your account will be U.S. based and via a debit card, your trustee [a bank?] will be responsible for the currency conversion computation.

Since you CANNOT deduct medical expenses paid directly by your HSA on your tax return, your question is moot for tax purposes. It is applicable only to the extent to make certain that your trustee is correctly reducing your account by the USD equivalent of the expenses charged.