How to Categorize Payment Made from HSA?

Hey there, @steveoh. 

Thanks for reaching out to the Community for support. I hope you're enjoying the day so far. 

I recommend consulting with your accountant for further advice on what to categorize this as. Your accountant will know what's best for you and your business. If you don't have an accountant, don't sweat. You can find one here in our Resource Center. 

In the meantime, feel free to check out Schedule C and expense categories in QuickBooks Self-Employed for further details about this process. 

Please let me know if you have any questions or concerns. I'll be here every step of the way. Take care and have a wonderful day ahead! 

I appreciate the canned response.  I don't need an accountant for this, more like app tech support.  I already understand that my contributions to my HSA are tax deductible up to $7200/year for a family of 2.  I just want to know what the app is asking me to do with the outgoing transactions from the HSA.  Do I just exclude them?  Or is there a different box I put those in?

Allow me to join in this thread and share additional information about categorizing a payment made from HSA, steveoh.

In QuickBooks Self-Employed, there are two types of healthcare deductions that can affect your quarterly tax estimates:

• Health Insurance Premiums, including dental and vision premiums
• Health Savings Account (HSA) contributions.
  
  

If you're qualified to deduct the expense, you need to fill in the Healthcare profile. Let me show you how:

1. Sign in to QuickBooks Self-Employed.
2. Select the profile ⚙ icon.
3. Select Healthcare.
4. Select the Healthcare premiums tab.
5. Enter your info and answer the questions about your health insurance situation.
6. Select the Health Savings Account tab.
7. Answer the questions about your health insurance situation.
8. When you're done, select Save.
   
   

As you fill out the form, we'll let you know which deductions you qualify for. We'll also give you specific steps to make sure you get them.

Once done, you can categorize the expense. Here's how to do it:

1. Go to the Transactions menu.
2. Find the healthcare expense, or select Add transaction and enter it manually.
3. Select Business for the type.
4. Select the link in the Category column.
5. Select Insurance and then Health insurance premium or Health Savings Account contribution for the type.
   
   

To learn more about this, check out these articles:

• Track healthcare deductions in QuickBooks Self-Employed
• Updates to expense categories in QuickBooks Self-Employed.
  
  

If you aren't qualified, you can exclude the payment on your Transactions page.

Stay in touch with me if there's anything else you need about this by commenting below. I'm always around to help categorize your transactions.

There is NO category! Intuit needs to update this an allow us to track our healthcare expenses that are used from this account since it is part of our business! Like you, I connected the account, the expenses show in our books but we have no options: are they personal expenses at this point? Who knows. Thankfully, your bank will give you a year end statement of total used. Many of my 2020 numbers didn't transfer to turbo tax. So I had to get many categories my self. Guess they added glitch to prepare us for the extortion of requiring payments monthly to access our own books. The cheaper one will require putting your own numbers in turbo tax at year end! The new QuickBooks policy of screwing self employed and holding our books for ransom was unbelievable in a pandemic year considering most of us made crap last year. Good thing I noticed $0 in my expense categories! HSA was $0 too. So when QuickBooks was missing at checkout (no explanation or offer to buy), I figured it was a glitch. No, lost my books until I coughed months ransom.. even weirder was it didn't deduct what I put in HSA! Said I didn't qualify, but it did deduct what was used from account? Very weird and doesn't help you or me. I still don't know what to do with it. Put it under personal - doctor. However, we can use it for gas going to doctors and there's no sub category for that. Intuit needs to add HSA expenses!

You could perhaps code the vendor to your name / owner pay or the name of your HSA and code the category as a reimbursement since you are using your HSA to reimburse medical expenses on an regular basis. Otherwise there is healthcare premiums for your medical insurance and there is HSA contribution category. This category is under payroll option. You can code vendor names for each employee for their reimbursements. If it is for owner, code the relevant vendor.