This Tuesday was the week from hell, mainly due to dealing — again! — with medical insurance issues.
I won't bore you with my personal, and continual, battles with insurance companies over paying for my health care procedures.
I will say that even with the coverage, the hubby and I have been able to itemize our — and by our, I mean mostly my — medical costs over the last few years and claim them on our taxes.
We're in the minority, both in itemizing and claiming medical expenses.
Many medical costs needed: The main reason most people don't claim medical expenses is that you can't write off every doctor and dentist and other Internal Revenue Service approved medical procedure. You can only deduct the amount that's more than 7.5 percent of your adjusted gross income (AGI).
If you make a decent living, that's a lot of expenses. So unless you're sickly or have some chronic condition(s) that require continued and continual monitoring, it's not worth it, either the tracking of allowable expenses or their actual total amount.
However, if you do happen to find one tax season that you're close to making it over the Schedule A medical expenses 7.5 percent of AGI threshold, then you might want to look for some other costs to count.
This post, 10 overlooked medical expenses that could make it worth itemizing tax deductions, offers some ideas of health care items you might be able to itemize.
Home COVID tests now count: And the IRS recently added another medical expense to its approved tax deduction list, COVID-19 tests.
Specifically, the IRS has announced that home testing for the coronavirus is eligible medical expense, meaning you can add it to your itemized medical expenses. The IRS decision also makes home COVID tests reimbursable under flexible spending accounts (FSAs) and health savings accounts (HSAs).
FSAs and HSAs are the two most popular tax-favored medical reimbursement accounts, but there are a couple of others. They are health reimbursement arrangements (HRAs) and Archer medical savings accounts (Archer MSAs). And yes, COVID-19 home tests also are approved items that can be paid from these accounts.
This is a welcome tax move for folks like Ge, who noted on Twitter that they do a lot of personal COVID testing.
I’m fully vaxxed but I still get a Covid test every week because I work in a bar. We require proof of vaccination, but I feel like it’s important to stay on top of it to keep others safe should I come down with Covid. So far negative tests every week!— Ge (they/them) 🏳️🌈🏳️⚧️ (@luckydevilgaia) September 10, 2021
PPE added earlier: Remember, too, that the IRS earlier this year approved the costs of personal protective equipment, aka PPE, purchased for the primary purpose of preventing the spread of coronavirus are deductible medical expenses. In Announcement 2021-7, the IRS says allowable PPE expenses include face masks, hand sanitizer, and sanitizing wipes. This tax-deduction addition applies to PPE used by the taxpayer, his or her spouse and dependents.
There's even better news if you're an educator. Such PPE expenses don't have to be itemized to help reduce your tax bill.
Before adding COVID precaution materials to the general approved medical expenses list, the IRS said that teachers and their school colleagues could include PPE costs in their claims of the above-the-line deduction for out-of-pocket classroom expenses.
This deduction, which doesn't require messing with Schedule A, could be worth up to $250 (it's adjusted annually for inflation, but it's been stuck at $250 for a while) of what educators spend on necessary classroom material during the tax year to provide their students with the best educational experience.
And to get the best tax experience — OK, tax result, since we know there are very few even good tax experiences — check out all the allowable medical expenses that you can deduct.
They could help your health, as well as lower your tax liability.
You also might find these items of interest:
- COVID-19 law expands FSA OTC options & ends Rx rule
- 10 ways FSA/HSA funds can help you cope with COVID-19
- Paid leave business tax credit expanded to encourage more COVID-19 vaccinations