Tracking Your Medical Expenses Helps at Tax Time

Medical expenses are climbing for many of us. And for those on a fixed income (like retirees) or for young families with more limited income, finding every break you can get will be extremely important. That’s especially true at tax time. Because you can potentially claim a deduction for unreimbursed medical expenses, you could save a bit of money when you file your income taxes.

“Unreimbursed” refers to expenses that you paid, which were neither covered nor reimbursed to you by your healthcare plan. These expenses might include copayments, deductibles, and out-of-pocket expenses relating to:

  • Treatments and surgeries
  • Preventive care
  • Hearing exams and hearing aids
  • Vision care and corrective lenses (glasses or contacts)
  • Dental care
  • Prescription medications
  • Purchases of insulin or diabetic supplies
  • Travel expenses, if you must travel to obtain medical care
  • Mobility devices or other necessary medical devices

If your unreimbursed medical expenses exceed 7.5 percent of your adjusted gross income, you can claim the amount of excess as a deduction on your tax return. With deductions, you reduce your amount of taxable income, so you can potentially save a bit of money. But in order to claim this deduction, you must have proof of your medical expenses, and attach Schedule A to your Form 1040 in order to list them.

So, saving proof of your medical expenses is one of the most important things you can do throughout the year. If you don’t already do this, go ahead and start now, so that you will have an easier time when you file your income taxes next year.

Also, tracking your expenses will help you during Open Enrollment. Whether you’re enrolled in Medicare or another type of health insurance plan, tracking your health insurance expenses can help you determine whether your plan is working well for you. If you find that it isn’t, you have the opportunity to shop around for another plan during Open Enrollment season each year. Remember to contact us at that time, and we’ll help you discover all of the options available to you.

 

Posted by PGIA
12 months ago / March 14, 2023

Filed Under: Health Insurance Tips