MEDICAL EXPENSE DEDUCTION
If you use Schedule A (Form 1040) to itemize your deductions, you may be able to deduct "unreimbursed medical and dental expense" "you actually paid" in the year that "exceed 7.5% of your Adjusted Gross Income". Read this line again to be sure you understand the specific requirements.
What Are Medical Expenses?
The costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body.
It includes payments for legal medical services rendered by physicians, surgeons, dentists, and other ledical practitioners.
It includes the costs of medical equipment, supplies, and diagnostic devices needed for these purposes.
It includes premiums paid for insurance that covers medical care; health incurance, dental insurance, long-term care insurance, Medicare Part B & D, and qualified long-term care services.
It includes the costs of transportation and travel to get medical care.
It does NOT include expenses that are merely beneficial to general health, such as vitamins, supplements, a vacation, or plastic surgery (unless required for specific medical purposes).
What Expenses Can You Include In The Year?
You can include only the medical and dental expenses you actually paid in the year with your own funds (and that were not reimbursed to you).
You cannot include medical expenses that were paid by insurance companies or other sources.
How Much Can You Deduct?
You can deduct on Schedule A (Form 1040) only the amount of your total allowed medical and dental expenses that is more than 7.55 of your Adjusted Gross Income.
NOTE: If you do not itemized your deductions and instead take your allowed standard deduction, you cannot deduct any of your medical expenses.
Whose Medical Expenses Can You Include?
Generally, you can include medical and dental expenses you pay for youself, your spouse (if filing jointly), and dependents on your tax return.
GENERAL LIST OF ALLOWED MEDICAL & DENTAL EXPENSES
Abortion (Legal only)
Acupuncture
Alcoholism
Ambulance
Annual Physical Exam
Artificial Limb
Artificial Teeth
Bandages
Birth Control Pills
Body Scan
Braille Books/Magazines
Breast Pumps/Supplies
Breast Reconstructive Surgery
Capital Expenses for Special Medical Equipment in the Home
Car special equipment
Chiropractor
Christian Science Practitioner
Contace Lenses
Crutches
Dental Treatment
Diagnostic Devices & Services
Disabled Dependent Care Expenses
Drug Addition
Drugs (Prescription only0
Eye Exam
Eye Glasses/Contact Lenses
Eye Surgery/Treatment
Fertility Enhancement
Guide Dog or other service animal
Health Instutite Fees (Prescribed only)
HMO Fees
Hearing Aids
Home Health/Nursing Care
Hospital Services
Insurance Premiums (Dental, Health, Long-Term Care)
Lab Fees
Lead-Based Paoin Removal
Learning Disability
Legal Fees
Lifetime Care Advance Payments/Founder's Fee
Lodging
Long Term Care
Meals
Medical Conferences
Medical Information Plan
Medicines/Drugs (Prescribed)
Nursing Home
Nursing Services
Operations
Optometrist
Organ Donors/Transplants
Osteopath
Oxygen
Physical Examinations
Pregnancy Test Kit
Prosthesis
Psychiatric Care
Psychoanalysis
Psychologist
Special Education
Sterilization
Stop-Smoking Programs
Surgery
Telephone (Medical Adopted)
Television (Medical Adopted0
Therapy
Transplants
Transportation (Medical purposes)
Trips (Medical)
Vasectomy
Vision Correction Surgery
Weight-Loss Program
Wheelchair
Wig
X-Ray
EXPENSES YOU CANNOT DEDUCT
Baby Sitting
Controlled Substances
Cosmetic Surgery (unless deemed medically necessary by a physician)
Dancing lessons
Diaper Service
Hair removal/restoration
Funeral Expenses
Health Club Dues
Household Help
Illegal operations/Treatments
Maternity clothes
Medicines/Drugs from other countries
Nonprescription Drugs/Medicines
Nutritional Supplements
Personal Use Items
Swimming Lessons
Teeth Whitening
Veterinary fees
Weight-Loss Program (if not medically prescribed)
RECORDKEEPING
You must keep accurate and complete records that document and substantiate your medical expenses should the IRS audit your taxes.
REIMBURSEMENTS
You can include in medical and dental expenses only those amounts "paid during the yeay" for which you received no insurance or other reimbursement.
You must reduce your total medical and dental expenses for the year by all reimbursements that you receive from insurance or other sources during the year; this includes payments from Medicare.
If you are reimbursed MORE than your medical and dental expenses, you may have to include the "excess" in income. (This will depend on how who pays the premiums---See IRS PUBLICATION #502/PAGE 18.
If you are reimbursed in a later year for medical and dental expenses you deducted in an earlier year:
1-You generally must report the reimbursement in income up-to-the-amount you previously deducted as medical and dental expenses.
2-Don't include as income the amount of reimbursement you received up-to-the-amount of your medical and dental deductions that didn't reduce your tax for the earlier year.
NOTE: IRS PUBLICATION #502/PAGE 19 has a worksheet for this calculation.
If you didn't deduct a medical or dental expense in the year you paid it because your medical and dental expenses weren't more than 7.5% of Adjusted Gross Income or because you didn't itemize deductions:
1-Don't include the reimbursement, up-to-the-amount of the expense, in income.
CALL NOW 561-746-1926 or 561-339-8102 if you have any questions or concerns or would like to schedule a FREE, Confidential, No-Obligation Tax-Saving Consultation.