Tax Advantage Pathways

1. Senior Deduction and Senior Bonus Deduction (Age 65+)

For taxpayers age 65 and older, the IRS provides an additional standard deduction on top of the regular standard deduction. For the 2025 tax year, a single filer who is 65 or older can claim the base standard deduction of $15,750, plus an extra $2,000 for being 65 or older, for a total of $17,750. For married couples filing jointly, if one spouse is 65 or older, the couple adds $1,600 to the base standard deduction of $31,500, and if both spouses are 65 or older, the total additional amount is $3,200, making the total deduction $34,700. This extra deduction is automatically available to seniors who do not itemize, helping to reduce taxable income.

Seniors are also eligible for the Senior Bonus Deduction which allows eligible seniors to claim a $6,000 deduction on their federal tax return for 2026. This deduction is claimed on Schedule 1 (Form 1040), line 10, “Other Adjustments”, and directly reduces the senior’s taxable income. By lowering taxable income, the deduction can effectively offset out-of-pocket expenses, such as a $300 audit fee, making the cost of the service significantly easier to manage.

These deductions act as a self-funding audit tool. The senior pays the $500 audit fee upfront, and the deductions reduce their taxable income, lowering the federal income tax owed and indirectly covering the audit expense. Because the deduction is fixed and does not require itemization, it provides a simple and straightforward method for seniors to fund professional services like audits while receiving a tangible tax benefit.

2. Pay with your HSA or Reimburse Yourself with Your HSA

Our audit services are designed to support the proper substantiation of medical expenses under Internal Revenue Code §§ 213(d) and 223. Whether you are claiming itemized medical deductions or utilizing a Health Savings Account (HSA), federal tax law requires that all amounts paid be for qualifying medical care and be adequately substantiated.

Because healthcare billing is governed by HIPAA (45 C.F.R. Parts 160, 162, and 164), and medical deductions depend on verifiable payments for qualifying care, our line-item forensic audit provides a structured method to confirm that your medical expenses meet applicable statutory and regulatory requirements.

As a result, the cost of the audit may be treated as an expense directly associated with establishing the deductibility of medical care. For HSA participants, this process also supports compliance with IRC § 223, which requires that all distributions be used exclusively for qualified medical expenses under § 213(d). You may pay directly with your HSA or pay with your own personal account and reimburse that account with HSA funds.

Upon completion, you will receive a formal substantiation report documenting the relationship between your medical expenses and applicable tax law, including references to IRC § 213(d), § 223 (where applicable), and relevant HIPAA standards. Your invoice will state “213(d) Medical Care Verification Review.” This documentation is designed to support your position in the event of an IRS inquiry.

3. Itemize Your Audit Expense

While IRS Publication 502 does not explicitly list certain record-related expenses, amounts paid to obtain or verify medical records and documentation necessary to substantiate medical care under IRC § 213(d) are considered deductible medical expenses. Examples include:

• Fees for obtaining copies of medical records, lab results, or diagnostic reports.
• Costs associated with gathering documentation to support insurance claims or verify medical services received.
• Expenses for medical charts or supporting materials that confirm the delivery of qualifying healthcare.

These expenses are treated as itemized medical expenses and can be included on Schedule A in the year they are paid. Maintaining proper invoices and documentation describing the purpose of each expense ensures compliance with IRS requirements for medical expense deductions. Upon audit completion, you will receive a formal deductability substantiation letter citing IRC § 223, IRS § 213(d), and the HIPAA Administrative Simplification standards 45 CFR Part 162. Your invoice will state “213(d) Medical Care Verification Review,” providing you with the documentation required to defend the distribution as a qualified medical expense in the event of an IRS inquiry.