Used approximately $3k from my HSA for medical expenses and travel - how likely will this trigger an IRS audit?

The good news is that using $3,800 from your HSA for qualified medical expenses is completely legitimate and not likely to trigger an audit by itself. The IRS processes millions of returns with HSA distributions every year. You don't need to file a paper return just to include HSA receipts. The IRS doesn't expect or want receipts with your initial filing. What's important is that you keep those receipts and documentation in your personal records for at least 3 years (some recommend 7 years to be extra safe). When you file, you'll complete Form 8889 to report your HSA contributions and distributions, but you won't need to send in the actual receipts. E-filing is completely fine for HSA withdrawals - millions of people do it every year. Your travel expenses for medical care can be legitimate HSA expenses if they meet the criteria (primarily transportation and lodging while away from home primarily for medical care). Just make sure you have documentation showing the medical purpose and costs. The likelihood of an audit based solely on a $3,800 HSA distribution is very low as long as you're reporting everything accurately on Form 8889.

After dealing with similar HSA issues, I found an AI tool called taxr.ai that was incredibly helpful for my situation. Last year I used about $4,500 from my HSA and wasn't sure what documentation I needed or if I should worry. I uploaded my medical receipts to https://taxr.ai and it analyzed everything to confirm which expenses were qualified medical expenses under IRS rules. It even flagged a couple expenses I wasn't sure about! The tool gave me peace of mind when e-filing without having to submit all those receipts with my return.

Just wanted to update after trying taxr.ai that u/WiseTaxPayer mentioned. I was worried about my HSA withdrawals for some specialized treatments and travel expenses too. I uploaded all my receipts including Uber rides to medical appointments and my hotel stay when I had to travel for a specialist. The system flagged everything properly as eligible or not, and even explained WHY certain expenses qualified under IRS rules! Super helpful and gave me confidence to e-file instead of messing with paper returns. It even generated a complete report I can keep with my tax records just in case. Wish I'd known about this sooner!

If you ever do get audited about your HSA (which seems unlikely for that amount), getting someone on the phone at the IRS can be nearly impossible these days. I spent WEEKS trying to resolve a simple tax notice last year. Finally used a service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in under 45 minutes when I'd been trying for days. You can see how it works here: https://youtu.be/_kiP6q8DX5c Honestly, just knowing this exists gives me peace of mind for filing my taxes with my HSA distributions this year. I'm not expecting problems, but it's good to know there's a way to actually reach the IRS if needed.

I owe an apology and wanted to share my experience. After posting that skeptical comment, I actually tried Claimyr out of desperation because I was getting nowhere trying to reach the IRS about an HSA question. The service had me on the phone with an actual IRS agent in about 35 minutes when I'd been trying unsuccessfully for weeks. The agent was able to confirm that my HSA distributions for medical travel were fine and explained exactly what documentation I should keep. Saved me hours of stress and waiting. I was completely wrong to doubt it - this service is legit and worth every penny when you really need to talk to the IRS.

Former tax preparer here. Just want to add that the threshold for HSA audits is generally much higher than $3,800. The IRS is primarily looking for unusual patterns or large unexplained distributions. As long as your HSA withdrawals roughly match your medical expenses and you're not doing anything bizarre (like withdrawing your entire HSA balance for a minor procedure), you're extremely unlikely to face scrutiny. One tip: create a simple spreadsheet listing each HSA withdrawal, the date, amount, and what medical expense it covered. Keep this with your tax records along with your receipts. This makes it super easy to respond if you ever do get a letter asking about your HSA.

Random thought - don't forget that if your travel was primarily for medical reasons, you can use your HSA for hotels (up to $50 per night, per person) and transportation costs like gas/mileage, parking, tolls, etc. Just not food. I did this last year when I had to see a specialist 300 miles away. Just make sure you document everything!

I had a similar situation last year with about $4,200 in HSA withdrawals for medical expenses and travel. I was also worried about triggering an audit, but everything went smoothly with e-filing. The key thing that gave me peace of mind was creating a detailed log of every withdrawal with dates, amounts, and what each expense was for - exactly like what Gael mentioned. I also scanned all my receipts and organized them in a folder on my computer. For the travel expenses, make sure you're tracking mileage at the IRS medical rate (which was 22 cents per mile in 2023, now 21 cents for 2024). I kept a simple log with dates, destinations, purpose of visit, and miles driven. For hotel stays, I made sure to keep receipts showing the medical purpose of the trip. Your $3,800 amount is really not that unusual - medical costs add up fast these days, especially with surgery and specialist visits. The IRS sees HSA distributions like this all the time. Just keep good records and e-file with confidence!