Are Medical Alert Systems Tax Deductible?

Gjenes Belamide

April 2, 2020

As a savvy consumer, you probably like to do your homework before making a new purchase—whether it’s a car, a washing machine, or a medical alert system. With the word “medical” in the title, many people ask, “Are medical alert systems tax deductible?” The answer is maybe. Even if you can’t claim the deduction on your taxes, you may be able to use funds from your health savings account (HSA) or other savings plan.

IRS rules for deductible medical expenses

tax deduction post-it and money on desk

 

As of today, the IRS has a long list of what does and does not qualify as deductible medical expenses. It doesn’t explicitly state that medical alert devices are eligible for itemized tax deductions. They do, however, allow various medical expenses to be deducted.

For example, the IRS will allow you to deduct the cost of installing special equipment or making improvements to your home for medical reasons. These improvements are typically more in line with a home renovation and can include widening doorways, modifying a bathroom, or upgrading with special kitchen equipment.

Also listed in this medical expenses section is a deduction for Medical Information Plans, which, according to the IRS, includes medical expenses that are “…paid to a plan that keeps medical information in a computer data bank and retrieves and furnishes the information upon request to an attending physician.”

This section can be used to deduct your medical alert system expenses.

Bay Alarm Medical emergency operators are able to store your medical profile in a computer database that allows them to provide EMTs and other emergency providers with the proper information needed in order to perform medical procedures. Therefore, this service can be deducted on your IRS form.

How to calculate your medical alert system tax deduction

The new tax law allows you to deduct “qualified, unreimbursed medical expenses” that are more than 7.5% of your adjusted gross income (AGI).  Your AGI is your gross income minus specific allowances for personal deductions and itemized deductions. If your AGI is $55,000, any unreimbursed medical expenses over $4125 would be deductible.

The calculations, forms, and worksheets can be complicated and confusing! You may need extra help.

  • Software: Use tax preparation software that walks you through the process, does the calculations, and completes the forms for you.
  • Tax accountant: A tax professional can help you maximize your deductions for the current year and help you plan ahead for next year’s taxes.
  • Volunteer tax preparation services: The AARP Foundation offers both online and in-person tax preparation services through its Tax Aide program. In addition, many state governments and local senior organizations also offer free tax help.

For a full list of deductions that the IRS will accept, visit:

https://www.irs.gov/publications/p502#en_US_2019_publink1000178982

What are my options if I can’t deduct my medical alert system?

The two common most reasons why you can’t deduct your medical alert system are:

  • Your unreimbursed medical expenses are less than 7.5% of your AGI.
  • You take the standard deduction instead of itemizing your taxes. Remember, the 2018 tax bill greatly increased the standard deduction and eliminated or restricted many itemized deductions. Tax experts suggest calculating your taxes with and without itemizing to see which strategy is best for your family.

If itemizing isn’t an option, you may still be able use money from your employer’s Flexible Spending Account (FSA), your Medical Savings Account (MSA), or your Health Savings Account (HSA) to cover the cost of your medical alert system. These plans can also help seniors on Medicare and Medicaid. Remember that Medicaid and Medicare don’t pay for medical alert systems, but you can use these tax-advantaged plans to pay for your medical alert. Check with your employer and/or review the terms of your MSA/HSA accounts to make sure it’s an allowable expense.

 


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