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Is Acupuncture Tax Deductible?
In tax year 2005, the IRS allowed taxpayers to deduct medical expenses for a limited number of CAM services and products, such as acupuncture and chiropractic care. These expenses were generally allowed for taxpayers and their spouses and dependents. Note that people cannot deduct the same medical expenses from their taxes and an FSA or HSA.
What are FSAs and HSAs, and can they help me with CAM expenses?
An FSA (short for flexible spending arrangement or flexible spending account) is a benefit offered by some employers. An FSA allows you to set aside pretax dollars each pay period for health-related expenses (some employers also make contributions). You submit receipts for yourself, your spouse, and/or your dependents to the FSA administrator for health-related expenses that were not covered some other way (for example, by insurance). You are then reimbursed for qualifying expenses (check your plan's language on this), such as deductibles, medical appointments, tests, and medicines.
An HSA (short for health savings account) is another type of tax-exempt account. It is for people who participate in a high-deductible health plan (also called a catastrophic health plan). In an HSA, you--not your employer--establish and maintain the account (although some employers make contributions). You can also invest your HSA funds to earn tax-deductible interest.
The Internal Revenue Service (IRS) has further information on these accounts. The IRS does not allow the same expenses to be reimbursed through an FSA or HSA and also claimed as tax deductions.