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Watch out for Non-deductible Wellness Expenses Scams

The IRS recently issued a reminder that personal expenses for general health and wellness usually do not qualify as medical expenses for tax purposes. These costs are generally not eligible for reimbursement through a health flexible spending arrangement (FSA), health savings account (HSA), medical savings account (MSA) or health reimbursement account (HRA). General wellness purchases also typically cannot be claimed as itemized tax deductions.

Examples of non-deductible, non-reimbursable health and wellness purchases include healthy foods for weight or blood sugar management. Dishonest companies aggressively market food and wellness products, claiming that these items become eligible for FSA/HSA/MSA/HRA reimbursement when the seller provides a doctor’s note to the buyer.

In reality, a doctor’s note generally does not change an ineligible expense into an eligible one. Requests for FSA reimbursement based on these bogus marketing claims typically get denied, and may jeopardize the tax advantages of FSAs and similar plans.

Under IRS rules, a health expense only qualifies for reimbursement if it directly relates to “a targeted, diagnosis-specific activity or treatment.” In other words, the expense must be part of a treatment plan created by a medical professional to address a diagnosed illness or medical condition. If you are unsure whether a particular health expense qualifies for reimbursement, check with your workplace benefits plan administrator before making the purchase.

 

About Chad Brzezinski, CPA, PLLC

Chad Brzezinski, CPA, PLLC is a Certified Public Accounting Firm providing accounting, tax, and other advisory services to businesses and individuals. The Firm’s expertise ranges from basic tax management and accounting services to more in-depth services such as financial statements. Combining expertise with one-on-one professional relationships, the Firm assures that every client receives the close analysis and attention they deserve.

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