Currently, about 10 million Americans have hearing aids or a related hearing device. Hearing aids are remarkably useful for treating hearing loss, especially since there is no cure for sensorineural hearing loss.
Only about 30 percent of people with hearing loss are receiving adequate care. Currently, there are about 25 million people who could benefit from purchasing hearing aids but, for various reasons, have not yet been willing or able to.
One of the most common reasons that people don’t purchase hearing aids is they are assumed to be expensive. Hearing aids, on average, cost between about $1,000 and $4,000 (according to a report from Consumer Affairs). While this puts hearing aids beyond many people’s typical monthly budget, there are actually quite a few ways that these costs can be controlled.
In many cases, hearing aids are tax-deductible. Deducting the cost of hearing aids from your taxable income can lower the amount you pay for hearing aids by as much as 35 percent. However, as you will find with many tax-related subjects, the deduction status of hearing aids can also be rather complicated. In this article, we will discuss everything you need to know about using hearing aids as a tax deduction.
Are hearing aids considered a medical expense?
Generally speaking, any expense that is used to treat a medical condition can be considered a medical expense. Though hearing loss is not classified as a disease, it is a recognized medical condition that affects about 35 million Americans. This classification holds true whether your hearing loss is conductive, sensorineural, mixed, or any other type of hearing loss. Hearing aids, cochlear implants, sound therapy sessions (with a licensed audiologist), and hearing tests can all be loosely categorized as medical expenses.
Can medical expenses, such as hearing aids, be used as tax deductions?
In the eyes of the federal government, virtually all personal medical expenses—including hearing aids—can potentially qualify for a tax deduction. However, there are some stipulations you will need to pay attention to.
Medical expenses can be claimed as an itemized tax deduction if the expenses collectively equal more than 7.5 percent of your adjusted gross income (AGI). When calculating your total medical expenses, be sure to include everything that is medical-related, including batteries, repairs, supplementary devices, and insurance premiums. Other “non-traditional” medical expenses, such as eyeglasses and basic prescriptions, can also be deducted.
Should I itemize my taxes?
In 2020, the standard tax deduction for individuals is $12,400. For married partners filing together, the standard deduction is $24,800 (or $12,400 each). This means that, even without itemizing all deductible expenses, you will be able to essentially write-off the corresponding taxable income. If, after adding up all possible personal tax deductions—medical expenses, personal business expenses, charitable donations, etc.—the sum of the deductions you qualify for is greater than the standard deduction, then it will be in your best interest to itemize expenses (including hearing aids). If you are unsure which tax deductions you currently qualify for, consider meeting with an accountant or other tax professional.
Do people with hearing aids qualify for the disability tax credit or earned income tax credit?
Two specific tax credits—the disability tax credit and the earned income tax credit—can both potentially affect individuals with hearing aids. The disability tax credit applies to individuals that are “at least 65 years old, retired because of your disability and get taxable disability income.” Your hearing loss (or other disability) will need to be severe enough that it “bars you from gainful employment.” Because of this, you will need a statement from a qualified physician.
The rules for the Earned Income Tax Credit (EITC) have been firmly established by the IRS. According to its official website, you may qualify for the EITC if “you have earned income and adjusted gross income within certain limits; AND you meet certain basic rules…” Because the EITC rules can be rather vague or difficult to interpret, they will need to be reviewed carefully upon filing. As is the case when itemizing tax deductions, anyone hoping to take advantage of the disability tax credit or the earned income tax credit would benefit from speaking with a tax professional.
It is also important to note that hearing expenses related to running a business can also qualify for tax deductions. If for business purposes, you needed to purchase hearing-assistant video conferencing equipment, special telephone accessories, or any other systems to address hearing issues, you may be able to reduce your taxable income.
Has the Hearing Aid Assistance Tax Credit been approved?
In recent years, there has been a minor push to pass a tax credit currently dubbed the Hearing Aid Assistance Tax Credit. However, this particular tax credit is yet to be approved by Congress and, in general, has only gained a small amount of political traction. The verbiage of the bill (which changes slightly with each passing Congress) suggests that all citizens with hearing aids should qualify for a guaranteed $500 tax deduction. If passed, it would remove the need for medical expenses to account for more than 7.5 percent of your adjusted gross income before they can be deducted. The bill, however, has never made it out of its committees, despite being proposed in both the house and the senate.
Conclusion – Are Hearing Aids Tax Deductible?
Hearing aids can often qualify as a tax deduction, though there are still several stipulations that the 10 million Americans with hearing aids will want to pay attention to. In order for hearing aids, or other medical expenses, to qualify as tax-deductible, the total cost of all medical expenses will need to be greater than 7.5 percent of your adjusted gross income (this includes batteries, insurance, and all other related expenses). In some cases, wearers of hearing aids may also be able to benefit from the earned income tax credit or the disability tax credit. When applied, these tax deductions can make the true cost of owning hearing aids a bit more manageable.