Are your out-of-pocket medical expenses giving you any tax benefit? Do you realize that unless you have an effective medical expense tax strategy in place, it is likely that your out-of-pocket medical expenses are NOT tax deductible? Without an effective tax strategy in place, your out-of-pocket medical expenses must meet two difficult thresholds before they can be deducted on your tax return.
As we meet with new clients, this is often an issue that hasn’t been explained to them before. Many new clients say they have been submitting their medical expenses to their prior tax accountant thinking they were being included on the tax return and reducing their tax burden. However, unless you meet the two difficult thresholds above, you are getting no tax benefit.
One simple Tax Strategy for Medical Expenses to consider is a Health Savings Account (HSA). If you meet the IRS qualifications for an HSA, the HSA allows you to contribute money and receive a tax deduction. This tax deduction occurs simply by depositing the money to the HSA, even if you do not have any out-of-pocket medical expenses for the year.
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Our blog is intended as a tool to keep people informed about relevant tax and accounting issues. If you have a question or an idea for a post, let us know!