Tax Deductions and HSAs – Where do Advocacy Services Fit?

In late Fall, we learned how to “rescue” clients and potential clients from the tragedy of choosing the wrong health insurance plan during Open Enrollment.

So we’ve turned over to a new year (Happy 2026 to you!) and now I’m making another suggestion to you about “rescuing” clients and potential clients in a very different way.

The inspiration for this post came from a conversation I’ve been following on Facebook in the Independent Advocate Forum. These are often questions that come up early in the year. They are:

Are health and patient advocacy services deductible on (American) income taxes?
Can a client use a Health Savings Account (HSA) to pay for health and patient advocacy services?

The answer to both questions is: probably, historically, and give it a try. (But – notice -it’s not really “yes”)

In fact, I’ll go so far as to tell you – that the answer to this question is

A great marketing message!

I’ve actually written on this topic many times previously (find links at the end of this post). This includes a warning to you as you discuss this possibility with clients and potential clients.

The warning is that the government has never specifically sanctioned either answer as YES. BUT… that’s not necessarily a bad thing!

Further, as it regards the marketing aspect of this message – mentioning the ability to take a deduction, or use an HSA, might mean the difference between being hired – or not. So – tell your potential and current clients!

Background: both lists (income tax medical deductions and HSA expenses) are basically the same list. The list(s) are long and cover dozens of mostly non-medical, but definitely health-related needs that are considered to be heavy duty and necessary enough to be on those lists.

[Important! Please note, that you can only use one or the other. If your your client pays for a health-related expense using their HSA, it can’t also be used it as a medical deduction.]

In 2012 ( a looong time ago!) when I was running APHA, I spent more than two hours on the phone with an IRS agent who not only loved this question, but was determined to help us find an answer. He and I went through the extensive lists of what items are, or are not, deductible – one by one.

The bad news: health and patient advocate services are not included on the lists.

The good news…

Many other similar types of services ARE on the list. In fact, what that agent determined was that our advocacy services are most similar to guide dogs for the blind.

So – his bottom line was this: Until the IRS audits someone specifically for including advocacy because it’s not specifically listed, there will be no final answer on the deductibility of advocacy services.

However, he recommended that clients to ahead and talk to their tax professionals about deducting the expenses. OR, if they do their taxes themselves, and if they qualify in every other way to make those deductions, then to go ahead and take them. (Qualify in other way means: the total amount deducted must equal 10% or 7.5% of one’s adjusted gross income (AGI), depending on the age of the taxpayer.)

So – that’s the answer!

In all these years (14 and counting…) as far as I know, the deduction has still never been tested. My guess is that it may have been discussed by the IRS in the past, but the formal test never took place because the answer is so obvious.