health savings accounts

The 'biggest thing' people forget about health savings accounts — and the IRS audit risk

Financial advisors warn that HSA holders risk IRS penalties if they don't keep receipts for out-of-pocket medical expenses when using the account as a long-term investment vehicle. While HSAs offer triple tax advantages, account holders must maintain documentation for decades if they wait to reimburse themselves, as the three-year audit clock starts at the time of withdrawal, not the original expense.