With the year come and gone, now is the time to get all your medical ducks in a row to save you money and prepare for the New Year. It may not be pretty and may take some time but by taking the time, you will be surprised how much money you can save on your taxes this year through medical deductions, out of pocket expenses, medical travel and more! Just take these steps to help keep more of your money in your own pocket this year!
4 Non-Taxing Ways to Save on Medical Expenses
- Fill all mail order prescriptions. Make a list of those medications you will need within the next 3 months and order any prescriptions you know you will need/use before the New Year. Savings: 1) The deductibles can be used towards your taxes to help put you over the Adjusted Gross Income (AGI) which decreases your taxable income on Schedule A and 2) this allows you to postpone the deductible for prescriptions before they renew on the 1st of January (if you have a deductible for prescriptions).
- Sort yearly medical receipts. Gather all your receipts for the year for anything that would have been an out-of-pocket medical expense. This includes some common household items that you may purchase frequently (Band-Aids, contact solution, hydrogen peroxide, etc). Just check the receipts for any items containing the “F” or similar stamp-denoting flexible spending healthcare items. Savings: Savings: 1) The deductibles can be used towards your taxes to help put you over the Adjusted Gross Income (AGI) which decreases your taxable income on Schedule A.
- Compile a list of all your medical travel mileage. Use a Vehicle Mileage & Expense book, spreadsheet or similar to track all medical travel for you and your dependants. This includes car mileage, tolls and parking fees when traveling to and from a medical establishment such as a clinic, doctor or hospital. 1) The deductibles can be used towards your taxes to help put you over the Adjusted Gross Income (AGI) that decreases your taxable income on Schedule A.
- Use up all flexible spending account money. If you have a Flexible Healthcare Spending Account (FSA) with your employer, check to make sure you have used all the money you have placed in this account by the end of the year. Most FSA will allow some grace period into the New Year but whatever you do not use, you lose. If you do have money left in such an account, gather your medical receipts and submit any “F” items for reimbursement.
When it comes to medical expenses, you have to be wise with your money. There are a number of ways to trim the fat from your medical expenses while maintaining the best care possible. These are just some of the benefits of being due diligent in your medical care and record keeping.
Don’t worry if you have not kept good records for this year. Next week starts a new year and with these tips, you can start the year off right to increase your medical savings while making the tax man happy.
Please note that all medical tax write-offs are subject to the 7.5% threshold of AGI. Consult a professional tax preparer or your tax software for more specific information regarding your individual tax circumstances.