H&W: IRS Releases Publication 502 and Publication 503 for 2015 Tax Returns

The IRS released Publication 502 and Publication 503 for use in preparing 2015 tax returns.  Publication 502 includes medical expenses that are deductible on a taxpayer’s 2015 return and Publication 503 covers the requirements necessary to claim the dependent care tax credit.

Changes in Publication 502 for 2015 include:

Health coverage tax credit (HCTC). The HCTC, which expired at the end of 2013, has been reinstated retroactive to January 1, 2014.

Standard mileage rate. The standard mileage rate allowed for operating expenses for a car when you use it for medical reasons is 23 cents per mile.

Some employers use Publication 502 as a guide for determining what expenses may be reimbursed under a Health FSA, HRA or HSA. Employers should use caution in using these publications beyond determining what expenses are deductible. The rules for reimbursing expenses from a health FSA, HRA or HSA may be different than for deducting the expenses on one’s taxes. For example, under Publication 502 an expense may be deductible the year in which it was paid; however, a Health FSA may only reimburse an expense in the year in which it was incurred.