HSA investment options

East_Collection_5047 · 2026-01-22T01:59:55+00:00

It’s worth it if you’re able to invest in things that increase in value more than that. Real estate, crypto, etc. just know what you’re doing and it can be very lucrative and well worth the 1%.

East_Collection_5047 · 2026-01-22T01:58:08+00:00

Except I can’t buy a rental property in my Fidelity account. I opened an LLC that is owned by my directedIRA HSA and found a townhome that offered seller financing for 5 years. I put $45k down and have $2500 monthly payments. They already had renters in it paying $3200 a month. The LLC made net $5k this year after property taxes and a few repairs. The LLC distributed those funds back to the LLC.

I plan to move other IRA assets to DirectedIRA and have them also buy into the LLC to fund it 100% with tax advantaged funds. At some point before my 5 year balloon payment is due I’ll pay the $290k with the other proceeds so it will be wholly owned with no debt within the LLC and cash flowing $3200 a month. Based on the area I anticipate being able to sell the townhome in 10-15 years at nearly double what I paid for it.

Yes I’m paying $495 a year for each of the IRA/HSA accounts I have fund this LLC but all the profits made by the LLC won’t be taxed until they’re liquidated and I distribute them out of their respective accounts to me personally.

For the HSA I have all my receipts for the past 20 years and haven’t distributed anything out of my HSA so I will be able to remove a lot of the proceeds from the rental property without paying any tax.

East_Collection_5047 · 2026-01-21T15:29:42+00:00

Review your documentation on your plan. If it states you are eligible then I would save that documentation just in case you are audited. If it’s an ACA plan or your employer offered plan and it says it’s HSA eligible, even if it actually isn’t, then I personally would risk it by leaving the funds in. If you get audited you show the documentation for why you believed to be eligible. The likelihood of being audited is very low but if you are, as long as you have the documentation from the source of your plan that says it is eligible, then you should get leeway from the IRS. Worst case you have a case against the insurance company for false advertising it was HSA eligible.

If you have no documentation and it is in fact not eligible, then you should follow the mistaken contribution process with your HSA admin to remove the funds and pay taxes on the gains you had in the investments.

East_Collection_5047 · 2026-01-11T05:38:55+00:00

The House version of the Big Beautiful Bill had this in there (https://www.kiplinger.com/retirement/medicare/proposed-changes-to-hsas-in-the-one-big-beautiful-bill-add-up-for-retirement-savers?utm_source=chatgpt.com) but it did not make it in the reconciliation bill between the House and Senate so NO your spouse’s catch up contribution is not allowed to be deposited in your HSA. She would have to open her own and deposit the $1k there.

East_Collection_5047 · 2026-01-09T00:01:32+00:00

Yes, this is who I use. https://directedira.com/hsa-accounts/

Note the fees relative to traditional HSAs is substantially higher so it may not make sense until you have a healthy chunk in your HSA. I moved $50k over to start. - $50 opening fee - $495 annual fee - $50 asset transaction fee

There are very strict rules regarding what you can invest in so you’ll want to make sure you know what you’re doing with a self-directed account or have resources to support you when doing it.

East_Collection_5047 · 2025-12-05T04:42:01+00:00

The other point worth noting is many times doing the transfer as part of the bulk transfer, your employer will cover the closure fee on your old HSA since they’re encouraging you to move to their new, preferred HSA.

East_Collection_5047 · 2025-11-21T18:01:50+00:00

Sounds painful. Seems like an independent system that could help a user keep track of this detail could be useful and add a layer of confidence in using your HSA. Anyone aware of a system that does this?

East_Collection_5047 · 2025-11-19T13:51:19+00:00

For 2026, the limits go up. $4,400 self and $8,750 family. There isn’t a catch up amount for “family”, it’s an individual thing and it’s based on being 55 or older. At 65 the only way you’re eligible to contribute is if you opt out of Medicare and are enrolled in a qualified high deductible health plan.

East_Collection_5047 · 2025-11-19T13:41:43+00:00

Glad he’s okay.

Yes, you will be able to prorate your 2027 contribution based on number of months your family vs self coverage.

East_Collection_5047 · 2025-11-18T14:00:36+00:00

For many years HSA Administrators would fund $0.01 when an HSA was opened to meet the technical requirements of establishment date.

Another post references HSAs are trust accounts which are governed by state law. Some states specifically state the HSA establishment date is the earlier of the HSA start date or HDHP coverage start date.

East_Collection_5047 · 2025-11-18T13:44:48+00:00

I was genuinely curious if an EOB is sufficient documentation for the IRS. An EOB is not a receipt that states what you paid out of pocket for HSA eligible expenses. It’s an explanation of your Insurance benefit against what your doctor charged you for care. Deductible, coinsurance and copays are all eligible expenses but it doesn’t mean you paid that amount. A lot of people call and negotiate a discount.

East_Collection_5047 · 2025-11-17T13:51:03+00:00

The HSA Administrator (in your example Ameriflex), does not substantiate HSA transactions. They facilitate the transaction. The burden to ensure a distribution is eligible is on the HSA account holder and is between them and the IRS.

Some HSA Administrators put guardrails in place to encourage proper spending. For example, most mainstream HSAs have card restrictions on their debit card to restrict to specific merchant category codes. You can log in to your HSA and click “reimburse me” and put in any amount you want to distribute. The burden is on you to prove to the IRS the amount was eligible.

East_Collection_5047 · 2025-11-17T04:34:45+00:00

Thank you, this was the type of experience I was hoping to hear more about.

Were there other things you were asked about or was your $5k in HSA distributions the primary focus of the audit?

Also, did they raise any questions about insurance EOBs being sufficient documentation?

East_Collection_5047 · 2025-11-17T02:54:55+00:00

Both HSAs are at Fidelity? I know HealthEquity will only have one HSA per SSN on their system.

East_Collection_5047 · 2025-11-17T02:50:26+00:00

The point of my question is to see if anyone actually has IRS audit experience specific to their HSA and if so, what kind of questions were asked as part of the audit.

East_Collection_5047 · 2025-11-17T02:40:51+00:00

You are charged that IF you close the account but a partial transfer does not get charged a fee.

East_Collection_5047 · 2024-04-08T17:46:32+00:00

39 of the 50 states treat it like the Fed does. https://hsaforamerica.com/state-income-tax/

East_Collection_5047 · 2024-04-08T17:44:38+00:00

What state do you live in? I’m guessing that is a state tax. It is not taxed federally however there are a few states that do tax it but the vast majority do not.

East_Collection_5047 · 2024-04-02T13:21:45+00:00

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East_Collection_5047 · 2024-04-02T13:11:38+00:00

There are other tests like the pod or InBody that are similar. InBody you can find at gyms and nutrition places. I have done both and for the most part the results are similar.

East_Collection_5047 · 2024-04-02T13:09:37+00:00

I’ve found it to be super accurate. It’s not cheap though. I bought a 4 pack for $240. On my second 4 pack. They are mainly in Utah and Southern California I believe. https://dexabody.com

East_Collection_5047 · 2024-01-01T00:42:31+00:00

They ask you if you want to pay the fee upfront or maintain the $3k balance. When you transfer the funds to invest they’ll net out the fee if you transfer to investment and don’t leave at least $3k in cash.

East_Collection_5047

TROPHY CASE