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View Full Version : Are Hearing Aids Tax Deductible?



riorebel
04-22-2011, 11:02 AM
A friend told me that I could deduct the cost of my hearing aids and batteries. Does anyone know if this is true? Thanks!

KarenK
04-22-2011, 11:08 AM
I deducted the cost along with other medical costs last year. It is based on a percentage of your income for the year.

jay_man2
04-22-2011, 11:40 AM
http://www.irs.gov/publications/p502/ar02.html#en_US_publink1000178852

Publication 502 says you can deduct the cost of hearing aids and batteries, subject to the limits as KarenK alluded to.

hamjor
04-22-2011, 12:11 PM
Yes, hearing aids and hearing aid supplies are definitely deductible, HOWEVER, only your eligible medical expenses* that exceed 7.5% of your adjustable gross income (line 37 on a 1040) are deductible.

So for example, say for the sake of calculating simplicity that you and your spouse file jointly, earned $100,000 in AGI last year, and paid $12,500 in deductible medical expenses including hearing aids last year. The first $7,500 (7.5% of $100,000) in medical expenses you and your spouse paid are not deductible. For the $5,000 in medical expenses above that, you get an itemized medical tax deduction (not a tax credit), reducing your taxable income and therefore your tax bill a bit. But only people who itemize deductions will benefit claiming medical deductions; many people save more money taking the standard deduction and would get no tax break for hearing aids. Also, itemized deductions can be and often are reduced further by the alternative minimum tax, likely to kick in if your income gets much higher than $100K.

Some people would have enough medical expenses to claim a deduction the year they bought pricey hearing aids, but not in subsequent years where they didn't have other big medical bills--they won't be able to deduct just the cost of hearing aid batteries then, because they won't clear the 7.5% AGI threshold buying aid batteries, I hope.



*If you file jointly, medical bills for you, your spouse, and your dependents can be deductible, but not other people you pay medical bills for such as adult relatives who are not defined as dependents in the tax code. Nor can you count veterinary bills for pets. I note this ruefully as our family paid some big medical bills in both those areas last year--not deducible. But we did get to deduct my hearing aids. Medical insurance premiums can be deductible for the part of premiums you (not your employer) pay. Only certain medical expenses not covered by insurance, or expenses paid by you as a copayment, can be claimed; you can't claim a deduction for medical bills paid by your health insurance company. Cosmetic medical expenses are usually not deductible. There are other gotchas, of course. See IRS Publication 502 linked by Jay above for details on everything that can and can't be claimed as a medical deduction.

jay_man2
04-22-2011, 03:45 PM
I've only cleared the limit a couple of times, when I had Lasik eye surgery in 1999, and a few years ago when I got a pair of America Hears aids. Even so, the refund resulting from the deduction after clearing the limit was a pittance. I think both times I spent it all in one place. :D

hamjor
04-22-2011, 09:17 PM
Last year was my first year being able to claim a medical deduction in part due to new aids, and I agree, for all the work I did compiling medical deductions, the tax savings are a pittance.

This website is not the place for political discussion, but there's buzz that one of the things being considered for tax reform is cutting federal tax rates BUT eliminating deductions and credits to try and simplify things, with a net neutral or slight gain in overall federal tax revenue. Even though I get to itemize deductions, if they can cut the form to one simple page, I'm all for it. I live in Illinois and we have a very simple state income tax form.

Of course the federal form is laughably complicated but even worse are some of the other state income tax forms I've seen and had to wrestle with, including California, NY, and Massachusetts. The tax code was obviously written by lawyers and accountants hoping to generate more business from people who can't figure their own taxes.

zafdor
04-23-2011, 05:01 AM
If the hardware is required for you to function in your job, you can deduct this as a work related expense having to do with a disability. There is no x% threshold you need to exceed for this, but I have always prorated by the amount of time used for work vs personal use.

hamjor
05-05-2011, 06:00 AM
I am finding this forum very informative as I am finding answers/suggestions for my concerns regarding Hearing Aids.

I was planning to have one hearing aid for my grandfather in some time, but then I postponed the purchase for a month, but by knowing that I can include its cost in medical expenses and can get the tax exemption on the cost, I will gift the hearing aids soon to my grandfather.

Thanks all for the informative thread :)

Whoa, Derval, careful there. First of all, read what I wrote in my first post in the thread above, particularly the "footnote" next to the asterisk, and you'll see that in most cases, buying aids for a grandparent would not be tax deductible. Your aids may be deductible, your spouse's aids may be deductible, and if your young child needs aids, those are deductible, but generally not aids or any other medical or other otherwise deductible expenses for other people including relatives. The only time it is deductible is if your grandparent is your tax dependent as defined by the IRS, not by you. You would have to be providing more than half your grandparent's financial support, you would have to claim him as your tax dependent on your return, and he would have to file his tax return stating that he was a dependent for someone else. If he does this, he can increase his own taxes due because he loses the ability to claim a standard tax deduction for himself, so if he has more than a few hundred dollars of non-Social Security income, he'll owe tax on all of that. Also, any tax break you get for this will be at most a few hundred dollars, not nearly as much as the aids will cost. It's a potential tax deduction (that partially reduces your taxable income), not a tax credit. And only the part of eligible medical expenses exceeding 7.5% of your income is deductible, anyway.

Secondly, when you get in to paying someone else's bills (and this includes hearing aids for an adult relative who is not currently your tax dependent), you have to be careful not to cross the line on gift taxes, or you can cause other expensive tax problems for yourself or for your estate. Now for 2011, the gift tax threshold is in the low five figures. It's higher than you would pay for just hearing aids, but if you begin paying your grandfather's other medical bills or expenses including rent or nursing care, you can definitely be generous to the point that you get yourself in trouble tax-wise. The reason they have gift tax rules like this is that wealthy people used to get around estate taxes by paying bills for relatives, which would deplete their estates. That doesn't work any more. Uncle Sam still collects his due in the form of gift taxes and they can bite middle-income people as well as wealthy people. Gift and estate taxes, if they apply, are HIGH.

Now you may say, yeah, but how will they know if I claim a tax deduction for my grandparent's hearing aids? Truth is they won't know unless they audit your return or ask you to prove your expenses, but this is not a road you should go down without a much better understanding of the tax rules than you showed in this post. Errors here can get quite expensive.

Don
05-05-2011, 09:57 AM
What chance does the hearing aid tax credit bill have of being passed? The House version is HR 1479. A tax credit of $500 per aid would be a great help.