How to Organize Medical Receipts and Records for Year End and Taxes

How to Organize Medical Receipts and Records for Year End and Taxes

It’s getting close to the end of the year and you may be thinking about clearing out your medical savings account, organizing medical paperwork for tax time, and scheduling year-end medical appointments.

Here are some things to consider to help you get organized.

1.  Will your medical expenses be tax deductible?

Medical expenses are deductible if they exceed 7.5% of your adjusted gross income, which is not the same thing as your W-2 stated income.  If you are way under this threshold, then you may not even need to save your medical receipts.  If you’re close to the 7.5% threshold, consider scheduling and paying for elective or necessary medical procedures, like chiropractic care or an eye exam, before year-end.

2.  Do you have a medical savings account or flex-spending account (FSA)?

If you have a medical savings account through your employer, you may be required to save receipts until the end of the plan year to allow them to audit select expenses.  The plan year may be later than the calendar year, so check with your employer.  Items paid out of your FSA may or may not be tax deductible. (See number 1 above.)

3.  Have you used up your medical savings account or FSA?

If you have an employer-sposored medical saving account, now is a good time to check it to ensure you use up all of your funds.  The money in the account is actual cash that was taken out of your paycheck, and it works hard for you, since it was likely not taxed, which is the benefit of an FSA.  So be sure to use every penny in the account.  Most plans allow funds to be used for prescriptions and elective covered expenses, such as extra pairs of glasses and alternative health care like acupuncture.

4.  Are you saving Explanation of Benefits (EOBs)?

Retain them only until bills are paid and disputes are closed.  EOBs are not bills, but rather statements that describe the proceedure, who is responsible for payments, and the benefits paid.  However, once a routine proceedure is paid for, there is usually no need to keep the EOB.  If you have a chronic condition with ongoing treatment, an EOB can help you track the flow of benefits, which may be confusing, and catch billing errors that may occur.

5.  Have you stashed away medical articles?

If you have a pile of material to read, now is the time to sift through it.  Chances are, technology and industry advances will make some information obsolete as soon as next year.  If you haven’t had a chance to read an article this year, you probably won’t read it next year, either.  Scan the article now, and if it pertains to something you need to do, like scheduling a mamogram or other preventative health test, then put it on your calendar now.

6.  Still looking for receipts that might be tax-deductible?

Contact your pharmacy and your physician’s office and request a printout of your account.  With just one call, they can provide you with a complete listing of charges that can be used when filing your taxes. (See number 1 above.)

7.  Did you develop a chronic condition this year?

Although you may not want to have one more thing on your to do list, now is a good time to organize your own health folder for future reference.  A plain manilla folder or three ring binder can be the start of a system to store test results and physician’s notes.  It’s much easier to start this kind of record early during treatment than to wait until you are overwhelmed with paperwork.  Remember that bills are not actually health records, and are not the most important part of your personal health record (PHR).  Test results and physician notes are good items to store in your own PHR.

 Have you started getting organized for tax season?

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