|Updated: 1/10/2008 10:29 am
||Published: 1/10/2008 10:29 am
Dan Pilla of taxhelponline.com, Are medical expenses killing you? Most Americans pay medical expenses but don’t get a tax deduction for them. The reason is that medical expenses aren’t deductible unless they exceed 7.5 percent of your adjusted gross income. Most people don’t reach that level. In my book, How to Double Your Tax Refund, I explain how to get the full benefit of medical expenses. The secret is a Health Savings Account, or HSA. It works like an IRA. You put money into an account designated to pay medical bills. You get a tax deduction when the money goes into the account. But the advantage of the HSA is that you don’t have to pay taxes on the money when it comes out, if it’s used for qualified medical expenses. These can include things like insurance co-pays, deductibles, prescriptions, eyeglasses – things not covered by your insurance. By using an HSA, you get a dollar for dollar deduction for your out of pocket medical expenses that you otherwise probably couldn’t deduct at all.