What should Alice's HSA distribution be after realizing her actual medical expenses?

To determine what Alice's HSA distribution should be after realizing her actual medical expenses, it's important to understand how Health Savings Accounts (HSAs) work. An HSA allows individuals to set aside money tax-free to pay for qualified medical expenses. The distributions from an HSA used for qualifying medical costs are not taxed, making it a beneficial financial tool for managing healthcare expenses.

In this scenario, Alice's distribution should align with her actual medical expenses incurred. If the total of her qualified medical expenses comes out to be $100, that is the appropriate amount to withdraw from her HSA. This amount reflects the necessary funds she needs to cover her expenses without exceeding the actual costs incurred.

Choosing a higher amount would mean Alice is either withdrawing more than what is needed for her medical expenses or potentially opening herself up to tax implications if those excess funds are not used for qualified expenses. Therefore, the distribution that accurately meets her medical spending is $100. This ensures she is making the most efficient use of her HSA funds while adhering to tax regulations.