Taxes and LASIK: Facts and Fallacies

Taxes and LASIK: Facts and Fallacies
Brinton Vision | LASIK St Louis

Tax time can be confusing, especially when the rules seem to change every year. When it comes to LASIK though, there are some bonuses written in to the tax code that can help you out. Unfortunately, there are also a lot of fallacies that can be confusing. We’d like to set those straight.

First, know that we are experts on refractive procedures, and we are not accountants or tax attorneys. We can share what we’ve been told by patients and other ophthalmologists. Be sure to ask your tax professional for advice regarding your specific situation.

Fallacy #1: An Expense is an Expense

LASIK and other refractive procedures are considered by the IRS to be qualified, tax-free medical expenses. What that means is that spending $6,400 on LASIK is not an accurate comparison to spending $6,400 on a cruise or basement remodel.

Let’s look at that more closely. You have to earn about $10,000 before taxes to have $6,400 left over after taxes to put toward a boat, a vacation, or improvements to your house.

Because money spent on laser vision correction is not taxed, you only have to earn $6,400 (or the amount that you will be spending on it.)

Fallacy #2: LASIK is a Cosmetic Procedure

LASIK and other vision correction surgeries are considered elective, but they are not cosmetic. Cosmetic procedures like Botox, face lifts, and liposuction are not qualified medical expenses. Elective treatments like LASIK are not in that realm.

Very few patients correct their vision for appearance reasons; they do it to improve their lives through clear eyesight. Insurance companies consider these procedures to be elective, and do not help cover the cost. Thankfully, the IRS feels differently, and the pre-tax deduction they allow can help quite a bit.

Fallacy #3: I Don’t Have Options when it Comes to LASIK

There are several creative ways to finance LASIK and to take advantage of it on your taxes. In addition to utilizing payment plans (sometimes available for zero down and with zero interest), there are three primary ways patients can take advantage of the tax-advantaged status of our procedures. Here’s a breakdown:

1) FSA Account
– 2018 IRS max is $2,650.
– Part can come from pre-tax employee contributions, part can come from company contributions.
– You typically must tell your employer you want to elect to have an FSA by October or November of the prior year.
– The entire amount is funded on Jan. 1 to the employee, even though the employee part of the contribution is usually deducted in increments over the course of the year.
– The entire amount reverts back to the company on either Jan. 1 of the following year, or in some cases as late as April 15, or even June 1. If you don’t spend this money by the deadline, the company takes it back and you lose it. This amount may not roll over. (Hint: Use it or lose it.)

2) HSA Account
– 2018 IRS max is $3,450 for individuals, or $6,850 if you have a spouse or child / dependent.
– Part can come from pre-tax employee contributions, part can come from company contributions.
– You can typically elect to start an HSA account anytime throughout the year, and can contribute as much as you want at any time.
– The account is funded as you go, throughout the year.
– The entire amount belongs to you and rolls over forever, even if you leave your workplace.

3) Tax Write-off
This year, if your medical expenses (including laser vision correction) total more than 7.5-10% of your gross income (AGI), depending on your age and other factors your tax professional will know, you can claim a deduction. That can make a big difference on how much you must pay—or how much you get as a refund—at the end of the year.

Each week, patients ask questions about the tax benefits of LASIK. As we always tell them, your tax professional knows best when it comes to your unique situation. It is clear, though, that there are often pluses when it comes to the tax implications of getting LASIK or other refractive procedures.

Of course, when it comes down to it, there is nothing that beats the priceless gift of natural, crisp, clear vision. To find out if you are a candidate for LASIK or any of its six modern variations, schedule your comprehensive Brinton Vision Ocular Analysis by calling 314.375.2020, or schedule online by clicking here.