Four Medical Expense Mistakes That Can Cost You a Lot of Money
As the cost of healthcare continues to climb, it's important to make sure money spent on medical expenses isn't wasted. Here are four of the most common mistakes people make with medical expenses.
Noga Leviner, CEO and Founder of PicnicHealth says avoiding the most common mistakes can save people money and give them the added benefit of a possible tax break.
According to Levinger, these are the four most common mistakes people make with medical expenses.
- Not Keeping Complete and Concise Records - Every dollar counts and having complete and well-organized records will help make the most of your medical expenses at tax time. The IRS requires evidence of expenses, so no receipt means you can't use that expense towards a potential deduction.
- Not Knowing What Medical Expenses are Deductible - Most people don't realize there are a large number of common treatments and supplies that can be applied towards a medical expense deduction. If you're not sure, keep everything, even travel expenses to and from medical appointments, and let a tax professional take care of the rest.
- Poor Timing of Surgeries and Expensive Tests - Scheduling multiple expensive medical procedures in the same calendar year has two benefits. One, it helps meet your health insurance deductible and two, you're more likely to get a tax break because the expenses exceed the IRS minimum.
- Failing to Use All of Your Flexible Spending Account (FSA) - This type of account, unlike a Health Savings Account (HSA), is 'use it or lose it' meaning any money remaining in the account at the end of FSA's account year is typically lost. Knowing what medical expenses your FSA covers will help ensure all of the money is spent by the end of the year.
Also, many health insurance companies cover all or a large portion of preventive health care, such as annual check-ups. Knowing how and what your insurance covers can help make the most of a visit to the doctor without costing a lot of money.