In case of an IRS audit, they will look for a few things: 1. the distribution was used to pay for or reimburse you for a qualified expense. 2, you didn’t get reimbursed for that same expense from somewhere else. 3. the expense was not part of an itemized deduction on any tax return. With Lively, we make maintaining receipts easy.
Source: Publication 969 (2018), Health Savings Accounts and Other Tax-Favored Health Plans.