How to Track Your HSA Spending in a Spreadsheet
Here are a few ways to track your HSA spending with a spreadsheet, plus tips on why it’s so important to keep accurate records.
When people get their first HSA card, they tend to treat it just like a credit card.
They’ll pull it out at the doctor’s office or the pharmacy, use it to pay their bill and never give it a second thought.
Unfortunately, that kind of thinking can quickly get you into trouble.
While HSA cards work in a similar way to traditional credit cards, they come with restrictions that warrant a more careful approach. If the IRS comes knocking about a purchase you made with your HSA card, you need to be able to prove that it was an eligible medical expense.
That means keeping, storing and tracking your receipts.
Here are a few ways to track your HSA spending with a spreadsheet – and why it’s so important to keep accurate records.
Why You Should Track HSA Spending
Your Health Savings Account (HSA) is a powerful financial tool. It’s a tax-advantaged savings account that allows you to save pre-tax money for most medical expenses.
That money will grow tax-free if left in your account, making it a solid investment vehicle as well as a way to fund your medical expenses.
The IRS has strict rules on what you can use an HSA for. Monthly insurance premiums, elective procedures and homeopathic remedies are generally excluded. Prescription medications, lab work and out-of-pocket expenses for doctor’s visits are allowed.
If you use your HSA card for a non-qualified medical expense, you’ll owe income tax on that amount and pay a 20% penalty.
Some people use their HSA card to pay for medical expenses directly with the provider. If they receive a medical bill, they’ll pay for it with their HSA.
Others pay for medical costs with their bank account, debit or credit card and then reimburse themselves from their HSA. If you prefer the latter method, remember to track your HSA spending closely.
Create a spreadsheet where you log what you purchased, the date, how much it cost, who the provider was and whether you used HSA funds or another form of payment. Make a note if you’re still waiting to be reimbursed for that payment.
Tiller automatically imports HSA account data into spreadsheets. Learn more here. →
Reminder to Track Your HSA Contributions
It’s also useful to track your HSA contributions, which have an annual limit of $3,500 for individuals or $7,000 for families in 2019.
Some HSA providers automatically track contributions for you and show when you’re getting close to the annual max, but others don’t.
If you contribute too much to your HSA and don’t notice until tax time, you’ll pay a 6% excise fee on the extra contributions. You can use the same spreadsheet to log your HSA contributions.
How to track your HSA
Tracking your HSA spending can be more of a hassle, because those funds are kept separate from your regular checking or savings account. It’s easy to forget about your HSA until you need to use it for medical expenses.
But it’s important to track HSA spending just like you would track your credit card balance. If you’re planning on using your HSA for upcoming surgery expenses and forget that your balance has dipped, you’ll be scrambling when the bill comes.
First, track your HSA contributions by setting up automatic transfers from your bank account to your HSA. This will prevent you from saving too much in your HSA.
Next, create a system to track your HSA spending.
Look at your HSA provider’s functionality. They may have their own tracking system and an easy customer interface.
Some even allow users to upload receipts directly to prove the eligibility of specific expenses.
Every HSA provider is different, so don’t be surprised if yours doesn’t have these features.
Unless your HSA is through your employer, you have the option of changing HSA providers any time you want. If your HSA is part of a company benefits package, you’ll have to stick with that provider. That’s when creating your own spreadsheet comes in handy.
Set up a dedicated time each month to go over your HSA.
Look through your medical receipts, check your HSA account and update the spreadsheet. Look ahead to see if you have any upcoming medical expenses you’ll want to pay for with your HSA, and make sure you’ll have the funds to cover the cost.
Bonus: a Redditor made a great HSA comparison spreadsheet. Read about it here. Open the spreadsheet in Google Sheets here.
Further reading: Tracking Your Medical Expenses & Claims via Making Your Money Matter