Can Hearing Aids Be Written Off In Taxes?
Yes, hearing aids and related expenses can potentially be written off in taxes as a medical expense if you itemize deductions and your total medical expenses exceed 7.5% of your adjusted gross income (AGI). It’s crucial to keep detailed records and consult with a tax professional for personalized advice.
Understanding the Tax Deduction Landscape
Navigating tax deductions can feel overwhelming, especially when it comes to medical expenses like hearing aids. The IRS allows taxpayers to deduct certain medical expenses that exceed a specific threshold. Understanding this landscape is the first step in determining if Can Hearing Aids Be Written Off In Taxes? for you.
The Medical Expense Deduction: An Overview
The medical expense deduction allows you to deduct expenses paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. This can include a wide range of healthcare costs, from doctor’s visits to prescribed medications. The key point is that these expenses must be primarily for medical care.
Qualifying Medical Expenses for Hearing Aids
To successfully claim a deduction for hearing aids, they must qualify as a medical expense. Generally, if a medical professional recommends or prescribes hearing aids to treat a hearing impairment, the cost qualifies. This extends beyond just the cost of the hearing aids themselves; it can also include related expenses.
What Expenses Related to Hearing Aids Can Be Deducted?
Several expenses related to hearing aids could be deductible:
- The cost of the hearing aids themselves.
- Batteries and other necessary supplies for the hearing aids.
- Repairs and maintenance of the hearing aids.
- Examinations and audiologist fees related to fitting and adjusting the hearing aids.
The 7.5% AGI Threshold
This is a critical factor in determining whether Can Hearing Aids Be Written Off In Taxes?. The IRS stipulates that you can only deduct the amount of your medical expenses that exceeds 7.5% of your adjusted gross income (AGI). AGI is your gross income less certain deductions, such as contributions to traditional IRAs or student loan interest payments.
Calculating Your Deductible Amount:
- Calculate your Adjusted Gross Income (AGI).
- Multiply your AGI by 7.5%. This is your threshold.
- Add up all your qualifying medical expenses for the year, including the cost of hearing aids and related expenses.
- Subtract the threshold (AGI 7.5%) from your total medical expenses. The result is the amount you may be able to deduct.
Itemizing vs. Standard Deduction
To take advantage of the medical expense deduction, you must itemize your deductions on Schedule A of Form 1040. This means forgoing the standard deduction, which is a fixed amount that depends on your filing status. Only itemize if your total itemized deductions (including medical expenses) exceed your standard deduction.
Record Keeping is Key
Maintaining thorough records is crucial when claiming medical expense deductions. Keep receipts for all hearing aid-related expenses, including the purchase of the devices, batteries, repairs, and audiology appointments. Also, keep a copy of the medical professional’s recommendation for the hearing aids.
Seeking Professional Advice
Tax laws can be complex, and individual situations vary. Consulting with a qualified tax professional or certified public accountant (CPA) is highly recommended. They can help you determine if you are eligible for the medical expense deduction and ensure you are claiming it correctly.
Common Mistakes to Avoid
Several common mistakes can derail your attempt to deduct hearing aid expenses:
- Failing to Itemize: Not itemizing deductions when your itemized deductions exceed the standard deduction.
- Missing the 7.5% AGI Threshold: Claiming a deduction when your medical expenses don’t exceed the 7.5% AGI threshold.
- Lack of Documentation: Not keeping proper records of your expenses.
- Including Non-Qualifying Expenses: Attempting to deduct expenses that are not considered medical expenses by the IRS.
- Misunderstanding HSA/FSA: Failing to properly account for expenses paid using a Health Savings Account (HSA) or Flexible Spending Account (FSA). These accounts often provide tax advantages already, so deducting the expenses again might not be possible.
Understanding HSA and FSA Implications
Using a Health Savings Account (HSA) or Flexible Spending Account (FSA) to pay for hearing aids can impact your ability to deduct them on your taxes. HSA and FSA contributions are typically made on a pre-tax basis, and withdrawals for qualified medical expenses are tax-free. This essentially means you’ve already received a tax benefit. Attempting to deduct those same expenses again would be considered double-dipping and is generally not allowed.
FAQs: Can Hearing Aids Be Written Off In Taxes?
Can I deduct the cost of hearing aid batteries on my taxes?
Yes, if the cost of the hearing aids is a qualifying medical expense, the cost of batteries necessary for the hearing aids to function is also deductible as a medical expense, as long as you meet the 7.5% AGI threshold and itemize.
What if my doctor only verbally recommended hearing aids? Is that sufficient documentation?
It’s best practice to obtain a written recommendation or prescription from your doctor. While a verbal recommendation might suffice in some cases, the IRS generally prefers written documentation to support your claim for medical expense deductions.
Can I deduct the cost of hearing aids for my child or other dependent?
Yes, you can include medical expenses you pay for your dependent children and other qualifying dependents, as long as they meet the IRS’s definition of a dependent. The same 7.5% AGI threshold and itemization rules apply.
What if my hearing aids are covered in part by insurance? Can I deduct the remaining cost?
Yes, you can only deduct the amount you personally paid out-of-pocket for the hearing aids and related expenses. You cannot deduct amounts reimbursed by insurance or any other source.
Are hearing aids considered durable medical equipment (DME)?
Yes, hearing aids are generally considered durable medical equipment (DME) by the IRS. DME is equipment that is primarily and customarily used for medical purposes, is not usually useful to a person who is not sick or injured, is durable, can withstand repeated use, and is used to alleviate or treat an illness or injury.
If I purchased hearing aids online, can I still deduct the cost?
Yes, the location where you purchased the hearing aids doesn’t matter, as long as they meet the criteria for qualifying medical expenses and you have the necessary documentation. Keep records of your online purchase, including invoices and payment confirmations.
What if I had my hearing tested but didn’t purchase hearing aids that year? Can I deduct the cost of the hearing test?
Yes, the cost of a hearing test is a qualifying medical expense because it is for the purpose of diagnosing a medical condition. As long as you meet the 7.5% AGI threshold and itemize, you can deduct the cost of the hearing test, even if you didn’t purchase hearing aids in the same year.
What if I use a payment plan to purchase my hearing aids? When can I deduct the expense?
You can deduct the expense in the year you actually made the payments, not when you initially purchased the hearing aids. If you’re on a payment plan spanning multiple years, you can deduct the portion of the cost you paid each year, as long as you meet the other requirements.
Does it matter if my hearing aids are digital or analog?
No, the type of hearing aid (digital or analog) doesn’t affect its deductibility, as long as it’s prescribed by a medical professional to treat a hearing impairment.
What happens if I am audited by the IRS and they question my hearing aid deduction?
You would need to provide documentation to support your claim, including receipts for the hearing aids, batteries, and audiology appointments, as well as a written recommendation or prescription from your doctor. Keeping thorough records is vital for audit protection.
Can I deduct the cost of traveling to get my hearing aids adjusted?
Yes, transportation expenses primarily for and essential to medical care are deductible, subject to certain limitations. This can include the cost of traveling to get your hearing aids fitted or adjusted. The amount deductible for using a car is the standard medical mileage rate (check the IRS website for the current rate) or the actual expenses for gas and oil. Parking fees and tolls are also deductible.
Where on the tax form do I report the medical expense deduction?
You report medical expense deductions on Schedule A (Form 1040), Itemized Deductions. You will need to complete this schedule and file it with your Form 1040.