Robert Loe CPA

Deducting Medical Expenses


Did you know you may be able to deduct the expenses that you spend on health related costs? If you itemize your deductions on your individual federal tax return you may also be able to expense part of the cost it took to pay for qualified medical expenses. These deductions would be claimed on IRS schedule A: Itemized Deductions. Generally you can only deduct expenses that are over 10% (A more beneficial rate of 7.5% if 65 or older) of your adjusted gross income (AGI). This means that if you made $30,000 this year, any amount of your total expenses that exceed $3,000 (30,000 x 0.10) can be deducted. These expense deductions also extend to spouses, dependents, and qualifying relatives. The following lists some of the most common expenses that are incurred by individuals throughout the tax year.

Medical:

There are a lot of qualified expenses related to medical expenses which includes: acupuncture, ambulance, most medical exams, prosthetics, medical scans, retrofit expenses for automobiles, chiropractors, contact lenses, glasses, medical devices (crutches, hearing aids, etc.), hospital services, cost of meals and lodging at a hospital, and many others. For a more comprehensive list, refer to IRS Publication 502.

Dental:

Most dental related expense can also be included in the deductions such routine checkups, specialized oral surgery, dental procedures (e.g. root canals, cavity fillings), as well as medication prescribed by your dentist. This does not include expenses such as regular toothpaste, floss, mouthwash, etc.

Prescription Drugs:

Almost any drugs that are prescribed to you by a licensed medical practitioner can be included in your list of itemized deductions. Examples of such are prescribed pain killers, prescribed birth control, prescribed allergy medication, etc. They must be prescribed to you; therefore it does not include any over the counter medicines or supplemental vitamins.

Insurance Premiums:

Any premiums that you pay for medical insurance can be included in your deduction as well as any Co-pay amounts that you incur during the tax year.

Medical Miles Driven:

You can include out-of-pocket expenses, such as the cost of gas and oil, when you use a car for medical reasons. You can’t include depreciation, insurance, general repair, or maintenance expenses. If you don’t want to use your actual expenses, you can use the standard medical mileage rate of 23 cents a mile. You can also include parking fees and tolls. You can add these fees and tolls to your medical expenses whether you use actual expenses or the standard mileage rate. In addition to this, you can deduct transportation costs to another city if the trip is related to receiving medical services. More qualifying expenses fan also be found in Pub 502.

 

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