Sunday, February 16, 2014

Rebates, taxes, and my HSA?

I recently used my HSA to purchase contact lenses. The admin at the optometrist's office provided me with a rebate worth $50 or about a quarter of the price of the lenses. Do I need to; a) declare the $50 as income, b) declare the $50 plus pay the additional penalty for an unqualified distribution from my HSA, c) simply reapply the $50 to back to my HSA retaining proof I did so, or d) enjoy the money without prejudice to taxes? A friend told me I must do either 'b' or 'c' but I can't find anything on the IRS web site supporting that…

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