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HSAs and Balance Transfers

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Question: 
Are banks held accountable when customers transfer money from HSA accounts to personal accounts or LLC accounts?
Answer: 

The custodian will report distributions to the IRS. It is up to the taxpayer to prove to the IRS if they were taxable or non-taxable withdrawals. The custodian is not the HSA police.

First published on 09/15/2024

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