Are Hearing Aid Costs Tax-Deductible?
Cost is one of the most common reasons those who are diagnosed with hearing loss do not purchase hearing aids. This is despite studies showing how those fitted with hearing aids can boost workplace productivity and increase their annual income by up to $12,000.
Many argue that the lack of available insurance coverage for hearing aids is to blame, but the truth is that only about one in five people who could benefit from wearing a hearing aid actually wear one. While this is due both to a combination of high costs and a social stigma against hearing loss, it is clear that many patients are being priced out of the hearing aid market at the outset due to the high initial payment.
Hearing aids are tax-deductible
Fortunately, hearing aid wearers can expect to save some money this tax season by writing off their hearing aids as a tax-deductible expense. The IRS has listed hearing aids and hearing aid batteries among the medical devices eligible for a tax-deduction. In some cases, audiology visits, repairs, and amplified telephones or other accessories may also qualify.
Save by donating hearing aids
Those who recycle their hearing aids through a charity organization such as Lion’s Club’s HARP Program can also apply for a deduction. By donating your old pair of hearing aids, not only will you save some money come tax season, but you will help provide the gift of hearing to one of the 360 million people suffering from hearing loss who may be unable to afford a unit for themselves. Those who donate newer and more functional hearing aids can expect to receive a higher deduction, as the rate is equal to the value of the hearing aids at the time of donation.
Claiming your deductions
For the IRS to recognize your hearing aid donation or expenses as tax-deductible, your deductions need to be itemized when you complete your tax return. The government also requires that deductions can only be claimed if your total out-of-pocket health costs are greater than 10 percent of your adjusted gross income, or 7.5 percent for those over the age of 65. Expenses can take the form of insurance payments, visits to a medical conference, audiology exams, and the cost of the hearing aid units. When itemizing your deductions, be sure not to include any medical insurance coverage provided by your employer. This means that someone earning an adjusted gross income of $100,000 would have to spend at least $10,000 ($7,500 for those 65 and older) in medical bills out-of-pocket to be eligible. The deduction is claimed as any money spent in addition to the original 7.5 or 10 percent.
If you are not currently spending more than 10 percent out-of-pocket, there are still ways to save money on your hearing aids and related costs. Patients with a Flexible Spending Account (FSA) or Health Savings Account (HSA) are not always subject to the same minimum deduction rates and may be able to write off their hearing aids if their health insurance deductible is high enough to qualify. Another way to meet the 10 percent threshold is to account for all approved health-related purchases, such as eyeglasses and prescriptions. While these often cost far less than hearing aids, the overall value may be enough to surpass the threshold and justify a deduction.
Other ways to save
If you are currently employed and have hearing loss, certain purchases made in order to allow you to effectively complete your job may also be deductible. These can include any kind of equipment meant to aid hearing comprehension, such as a listening device or customized computer. Not all states provide the same benefits to those with a disability, but be sure to read about the availability of a Disability Tax Credit in your area to see if you qualify.
Although it has not yet been passed by the Senate, there is currently a bill being proposed that would offer a $500 tax credit every five years for the purchase of an authorized hearing aid. For example, for those who make less than $150,000 a year living in New Jersey, there is a credit available that will provide $1000 per hearing aid.
The easiest way to save money on your hearing loss treatment costs is to keep track of all related purchases. This way, you can quickly itemize your expenses and receive a good chunk of your tax money back without the hassle of shuffling through receipts and insurance bills. If you have any additional questions about your coverage or eligibility, schedule an appointment with a hearing care professional using our online locator to discuss any available options so that you don’t end up paying more for your hearing health than necessary.