HSA and record retention

[Kurt V. Ullman]

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

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>

[Taxed and Spent]

On 5/11/2017 7:21 AM, Kurt V. Ullman wrote:
> How long should I keep information on HSA like deposits, payments for
> services, etc.?
>

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.

[Stuart O. Bronstein]

Taxed and Spent <nospam...@nonospam.com> wrote:
> Kurt V. Ullman wrote:

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

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.

>From a practical standpoint, however, the IRS is busy, and after a
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.

--
Stu
http://DownToEarthLawyer.com

[Stuart O. Bronstein]

"D. Stussy" <spam+ne...@bde-arc.ampr.org> wrote:
> "Kurt V. Ullman" wrote

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

> "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.

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.

--
Stu
http://DownToEarthLawyer.com

[Kurt V. Ullman]

On 5/25/17 10:06 PM, Stuart O. Bronstein wrote:
> "D. Stussy" <spam+ne...@bde-arc.ampr.org> wrote:
>> "Kurt V. Ullman" wrote
>
>> How long should I keep information on HSA like deposits, payments
>> for services, etc.?
>> -----
>>
>> "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.
>
> 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.
>

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.