Are medical expenses deductible if reimbursed by Health Care Sharing Ministry?

Thanks for the response. I'm in a similar situation but with a twist - my HCSM only reimbursed me for about 60% of my expenses. If my total medical expenses were $20,000 but I only got reimbursed $12,000, can I deduct the remaining $8,000 (assuming it's over the 7.5% threshold)? And do I need to keep any special documentation to prove this partial reimbursement?

Yes, you absolutely can deduct that remaining $8,000 as long as it exceeds 7.5% of your AGI. The IRS only cares about what you actually paid out of pocket after all reimbursements were applied. For documentation, you should keep all your medical receipts, along with statements from your HCSM showing exactly what was reimbursed and what wasn't. In case of an audit, you'll want to clearly show the total expenses, the reimbursed portion, and the remaining amount you paid yourself. I recommend creating a simple spreadsheet that breaks this down clearly alongside your supporting documents.

How does taxr.ai work with things like this? Does it actually give you specific advice about your HCSM situation or just general tax rules? I'm wondering because my tax software doesn't seem to understand how to handle my Christian healthcare sharing ministry at all.

Is it expensive? I'm already frustrated about paying for my regular tax software that doesn't help with these edge cases. And does it integrate with TurboTax or is it completely separate?

It works by analyzing the actual documents you upload - so you can scan your HCSM statements, medical bills, and reimbursement details, and it identifies exactly what's deductible and what isn't. It's much more specific than general advice because it's looking at your exact situation. It's completely separate from your tax software, but it gives you clear guidance that you can then apply when filling out your tax forms. Think of it as having a tax expert look over your documents without the high hourly fees. You just take the information it provides and enter it correctly in whatever tax software you're already using.

Wait, how does this even work? I thought it was literally impossible to get through to the IRS these days. Is this some kind of priority line or something?

Sounds like a scam to me. Nobody can magically get through to the IRS when their lines are jammed. And even if you could, why would you trust some random service with your personal tax information just to make a phone call?

It's not a priority line - they use technology that continuously redials the IRS using their system until they get through, then they connect you directly. Once you're connected, you're talking directly to an official IRS agent, not to Claimyr. You don't share any sensitive tax information with Claimyr at all - they're just getting you past the busy signals and hold times. Once you're talking to the IRS, that's a direct conversation between you and the government. You can ask all your specific questions about your HCSM situation without any middleman involved in the actual tax discussion.

Is this actually true? I thought HCSM payments were considered religious donations or something similar, not medical expenses. Can you point to any IRS guidance that says some portions might be deductible? I've been paying into Medi-Share for years and would love to deduct even part of it.

I should have been more specific. You're right that the vast majority of HCSM payments aren't deductible as medical expenses. What I was referring to is that some HCSMs have separate fees structure where they break out administrative services that might be considered medical expense deductions. Looking at the IRS guidance more carefully, it appears this is a gray area at best. The monthly "shares" that most people pay certainly aren't deductible as medical expenses, though some may qualify as charitable contributions if the HCSM is a qualified 501(c)(3) organization. I'd recommend checking with your specific HCSM to see if they provide any tax guidance on how to treat different portions of your payments.

Does this apply the same way if you're self-employed? I pay for my HCSM through my small business and was told by someone that I could deduct it as a business expense since it's like health insurance for my employees (which is just me).

@Aisha Hussain Unfortunately, HCSMs don t'qualify as health insurance under IRS rules, so you can t'deduct them as a business expense even if you re'self-employed. The IRS has specific requirements for what constitutes qualified health insurance for business deduction purposes, and HCSMs don t'meet those criteria. However, as @Mateo Martinez mentioned, if your HCSM is a qualified 501 c(3)(organization,) you might be able to deduct your payments as charitable contributions on your personal return not (business .)You d'need to check your HCSM s'tax-exempt status and any limitations they provide on deductibility. For self-employed health insurance deductions, you d'need actual health insurance that meets ACA requirements. I learned this the hard way when I tried to claim my HCSM payments as a business expense a few years ago!