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I have a Health Savings Account. Is the annual administration fee of $45.00 tax deductible? If so, where do I enter this amount?

Forum|Forum|7 years ago
June 6, 2019
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Best answer by AnnetteB6

If the administration fee was paid directly from the Health Savings Account (HSA), then the amount is not deductible.

Funds in the HSA have either been put into the account without having been taxed, or a deduction has been taken for them. Therefore, to deduct the administration fee would be “double-dipping”.

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CCWuellnerAuthor

I paid the $45 fee directly to the administrator. It was not paid from the Health Savings Account.

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AnnetteB6

I have not been able to find a resource that addresses this one way or the other when the fees are paid out of pocket rather than from the HSA account. So, looking at it as if it were deductible, where would it go? It would not be considered a medical expense, so it wouldn’t be reported there.

The only possible place that it may fit would be as part of Schedule A Itemized Deductions subject to 2% of your AGI. According to the IRS, “You can deduct investment fees, custodial fees, trust administration fees, and other expenses you paid for managing your investments that produce taxable income.” However, if the funds in the HSA are used for the purpose that they are intended, they are not taxable income. Therefore, to fall on the conservative side of the fence, my recommendation is to not deduct the fees.

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AnnetteB6Answer

If the administration fee was paid directly from the Health Savings Account (HSA), then the amount is not deductible.

Funds in the HSA have either been put into the account without having been taxed, or a deduction has been taken for them. Therefore, to deduct the administration fee would be “double-dipping”.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

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chiachen89

Are these expenses considered medical expenses then? It not we have to pay 20% penalty for this distribution, which was done without our consent, it was withdrawn by the health administrator and not users ourselves.