The IRS generally allows taxpayers to take a deduction for expenses they paid during the taxable year for medical care—as long as they’re “qualified medical expenses.” Alternatively, these medical expenses can typically be paid or reimbursed under a health savings account (HSA), health flexible spending arrangement (FSA), Archer medical savings account (Archer MSA) or health reimbursement arrangement (HRA).
The IRS recently issued updated guidance to provide further clarity on which expenses qualify.
According to the FAQs, the following are generally reimbursable from an HSA, FSA, Archer MSA, or HRA:
According to the FAQs, the following are generally not reimbursable from an HSA, FSA, Archer MSA, or HRA:
Note on FSA substantiation requirements
To help avoid having an FSA reimbursement taxed as wages, expenses should be fully substantiated by an independent third party. This substantiation information should include:
You should also certify that any expense paid by the plan hasn’t been previously reimbursed by insurance or otherwise, and that you won’t seek reimbursement from any other plan covering health benefits. An explanation of benefits from an insurance company that provides your share of the cost of care (copay, coinsurance, and/or deductible) meets this need.
The following have been identified as potentially questionable practices that don’t meet the substantiation requirements.
Keep in mind, expenses paid with debit cards must also meet the same substantiation requirements. Some debit card expenses can be “auto-substantiated”. The term auto-substantiated refers to medical expenses that may be approved without additional substantiation under the proposed cafeteria plan regulations. See the IRS memo for more information on auto-substantiation.
Speak to your advisor if you have questions about qualified medical expenses. If you don’t have an advisor and are interested in learning more about Goldman Sachs Personal Financial Management? Contact us today.
Based on Updated IRS guidance on Qualified Medical Expenses by Goldman Sachs Ayco Personal Financial Management, © 2023 Goldman Sachs Ayco Personal Financial Management.
United Capital Financial Advisers, LLC d/b/a Goldman Sachs Personal Financial Management (“GS PFM”) is a registered investment adviser, an affiliate of Goldman Sachs & Co. LLC (“GS&Co.”), and subsidiary of The Goldman Sachs Group, Inc., a worldwide, full-service investment banking, broker-dealer, asset management, and financial services organization. Advisory services are offered through United Capital Financial Advisers, LLC and brokerage services are offered through GS&Co., member FINRA/SIPC. How we are compensated by you may change over time and will depend on various factors. Please ask questions and refer to GS PFM’s publicly available Form ADV where applicable.
GS PFM makes recommendations based on the specific needs and circumstances of each client. Clients should carefully consider their own investment objectives and never rely on any single chart, graph, or marketing piece to make decisions. Investing involves risk, and investments may lose value. There are no investment strategies that guarantee a profit or protect against loss. GS PFM does not provide legal, tax, or accounting advice. Clients should obtain their own independent legal, tax, or accounting advice based on their particular circumstances.
The information contained herein is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered investment advice. The material is based upon information which we consider reliable, but we do not represent that such information is accurate or complete, and it should not be relied upon as such. The information, data, analyses, and opinions contained herein include confidential and proprietary portfolio information of GS PFM, may not be copied or redistributed for noncommercial or personal purpose without GS PFM’s expressed permission.
All names, logos, and slogans identifying GS PFM or GS PFM’s products and services (including, without limitation, HonestConversations®, MoneyMind®, FinLife®, Financial Control Scorecard®, Live Richly℠, We Help You Live Richly℠, Helping People Live Richly®, One Best Financial Life®, Ideal Life Index®, GuideCenter®, InvestmentViewfinder℠, GS PFM Financial Life Management®, and Financial Years of Freedom℠) are trademarks and service marks or registered trademarks and service marks of GS PFM or its affiliates in the United States and/or other countries.
In July 2019, Goldman Sachs acquired United Capital Financial Advisers, LLC (“United Capital”). Not all services, products, tools and practices described apply or are available to all clients. Products and services obtained by United Capital clients prior to the Goldman Sachs acquisition were subject to different standards of review and diligence. Before agreeing to engage in services with GS PFM, you should consult with your advisor about the particular services, products, tools, and practices that will be applied to your relationship with GS PFM.
© 2023 United Capital Financial Advisers, LLC d/b/a Goldman Sachs Personal Financial Management. All Rights Reserved.
United Capital Financial Advisers, LLC d/b/a Goldman Sachs Personal Financial Management (“GS PFM”) is a registered investment adviser and an affiliate of Goldman Sachs & Co. LLC and subsidiary of The Goldman Sachs Group, Inc., a worldwide, full-service investment banking, broker-dealer, asset management, and financial services organization.
The information contained herein is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered investment advice. GS PFM does not provide legal, tax, or accounting advice. Clients should obtain their own independent legal, tax, or accounting advice based on their particular circumstances. Please contact your financial adviser with questions about your specific needs and circumstances.
Information and opinions expressed by individuals other than GS PFM employees do not necessarily reflect the view of GS PFM. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice.
Tell us about yourself at no cost or obligation.
By submitting this information, you hereby authorize and request that PFM contact through any direct contact and any automated means, including but not limited to use of an auto-dialer, pre-recorded/artificial voicemail and SMS, and by email to discuss PFM’s products or services and you are consenting to receive certain materials from PFM by email or other means of electronic delivery. In addition, you acknowledge that PFM will use your information as described in its and . PFM may share your information with other subsidiaries of The Goldman Sachs Group, Inc. and they may also contact you directly through any of the same means listed above.
To withdraw your consent to receive calls or to change your contact preferences, please call us at 1 (800) 796-3315. To stop marketing emails, follow the opt-out instructions in the email received. To revoke your consent to receive communications electronically, please contact your GS PFM team.