Can I claim medical expenses from a health care sharing cooperative as tax deductions?

The IRS is pretty specific about what qualifies as deductible medical expenses. Health care sharing ministry payments exist in a bit of a gray area, but I can help clarify. First, your monthly "shares" (payments) to other members generally are NOT deductible as medical expenses. These are considered similar to insurance premiums for a plan that covers someone else's care, not your own medical expenses. However, any out-of-pocket medical expenses you paid yourself (not reimbursed by the sharing ministry) would potentially be deductible if you itemize deductions on Schedule A. Remember that you can only deduct medical expenses that exceed 7.5% of your adjusted gross income (AGI). As for payments received from other members to cover your medical expenses, these are generally not considered taxable income. The IRS typically views these as gifts or personal arrangements rather than income. I'd recommend keeping detailed records of all your actual medical expenses separate from your monthly share payments to make tax filing easier.

I was in a similar situation last year with medical expenses and found this great tool called taxr.ai that really helped me figure out what I could deduct. You upload your medical receipts and sharing ministry statements, and it analyzes everything to tell you exactly what qualifies as a deduction. I was about to miss out on some serious deductions until I used it! The site (https://taxr.ai) has a specific section for non-traditional healthcare arrangements including sharing ministries. It breaks down what portions can be deducted and gives you documentation to support your deductions if you get audited. Saved me so much time trying to interpret IRS rules.

Just wanted to update about my experience with taxr.ai that someone mentioned earlier. I was skeptical but decided to try it with my Christian Healthcare Ministries statements. The tool immediately identified which of my expenses could potentially qualify for deduction (the out-of-pocket ones I paid myself) and which couldn't (my monthly shares). What really impressed me was that it flagged some medical travel expenses I didn't know were deductible - the mileage driving to specialists that my sharing ministry didn't cover. It created a report showing I had about $9,300 in potentially deductible medical expenses, though after applying the 7.5% AGI threshold, I could only claim about $3,800. Still better than nothing! It also explained that the payments I received from other members weren't taxable income, which was a relief since that wasn't clear from my ministry's documentation. Definitely cleared up my confusion.

If you're struggling to get clarity from the IRS about health sharing ministry deductions, you might want to try Claimyr. After spending hours on hold trying to get an answer from the IRS about my Trinity HealthShare payments, I used https://claimyr.com and they got me connected to an actual IRS agent in about 20 minutes. The IRS agent was able to clarify exactly how my health sharing ministry payments should be treated for tax purposes. You can see how the service works in this video: https://youtu.be/_kiP6q8DX5c - basically they navigate the IRS phone system for you and call you back when an agent is on the line. I was pretty surprised how well it worked since I'd previously spent multiple days trying to get through on my own with no luck. The agent I spoke with had dealt with health sharing ministries before and gave me specific guidance for my situation.

I have to admit I was wrong about Claimyr. After my skeptical comment, I decided to try it anyway because I was desperate for answers about my Samaritan Ministries deductions. Used the service yesterday, and they got me through to an IRS tax law specialist in about 15 minutes, which was shocking after my previous failed attempts. The specialist explained that while my monthly shares aren't deductible as medical expenses, any amounts I paid for my own medical care above what was shared by other members could be deductible if I itemize and exceed the 7.5% AGI threshold. She also confirmed that payments received from other members aren't considered taxable income. What was most helpful was getting clarity about where to report everything on my tax forms. I've been doing it wrong for years! Would've spent another 3+ hours on hold without this service, if I even got through at all.

Has anyone considered using an HSA (Health Savings Account) alongside their health sharing ministry? I've been doing this for a couple years and it helps with the tax situation. Even though health sharing ministries don't qualify as high-deductible health plans for HSA eligibility purposes, you can still qualify if you have a separate HDHP. I have a minimal HDHP with a $7,000 deductible that costs me about $120/month just to maintain HSA eligibility. Then I max out my HSA contributions ($3,850 for individuals, $7,750 for families in 2023), which are tax-deductible. I use those pre-tax HSA funds to pay for qualified medical expenses that my sharing ministry doesn't cover. This approach gives me some guaranteed tax benefits while still participating in my health sharing community. Might be worth looking into.

OP, something nobody's mentioned yet - if your spouse has access to employer-sponsored health insurance but is choosing the sharing ministry instead, you might face additional scrutiny if audited. The IRS sometimes views opting out of available insurance as a choice that shouldn't increase your tax deductions. Also, keep in mind that starting with the 2023 tax year, the IRS has been looking more closely at large medical expense deductions, especially from non-traditional arrangements. Make sure you keep meticulous records of all medical payments, including dates, amounts, recipients, and purpose. If your AGI isn't high enough to benefit from itemizing medical expenses, you might be better off taking the standard deduction anyway, which is $27,700 for married filing jointly in 2023. Run the numbers both ways in TurboTax to see which gives you the better outcome.

I've been dealing with a similar situation with my Altrua HealthShare membership. One thing that helped clarify things for me was understanding that the IRS Publication 502 specifically addresses what qualifies as medical expenses. The key distinction is between what you pay FOR medical care versus what you pay TO SUPPORT a health sharing arrangement. Your monthly shares are considered contributions to support the ministry's operations and other members' needs - not direct payments for your own medical care. However, any medical expenses you pay out-of-pocket (deductibles, copays, services not covered by the sharing ministry) can potentially be deductible if you itemize. This includes things like prescription costs, dental work, or specialist visits that the ministry didn't fully cover. One tip: if your sharing ministry has a "personal responsibility" amount (similar to a deductible), those out-of-pocket payments for your own care would likely qualify as deductible medical expenses, subject to the 7.5% AGI threshold. Keep detailed records separating your monthly ministry contributions from your actual medical expense payments - this will make tax time much easier and help if you face any IRS questions down the road.

Just wanted to add another perspective as someone who's been using Medi-Share for about 5 years now. The tax treatment can definitely be confusing, but I've found it helpful to think of it this way: your monthly shares are like insurance premiums (not deductible), while any medical expenses you pay yourself are potentially deductible. One thing I learned the hard way is to keep separate bank accounts or at least very detailed records. I use one account for my monthly shares to other members, and track all my out-of-pocket medical expenses separately. This makes it much easier at tax time to calculate what might be deductible. Also, don't forget about things like medical travel expenses if you had to go out of town for treatment that your sharing ministry covered. The IRS allows deduction of mileage or actual transportation costs to and from medical appointments, even if the treatment itself was paid for by other members. For what it's worth, I've never had any issues with the IRS regarding my health sharing ministry arrangement, but I always keep very detailed records just in case. The key is being able to clearly separate what you paid to support the ministry versus what you paid for your own medical care.