You’ll usually claim this deduction if you had large, unreimbursed medical expenses. To deduct medical and dental expenses on your return, both of these must apply:
You itemize deductions on Schedule A.
Your expenses are more than 7.50% of your adjusted gross income (AGI) -- or 7.5% of AGI for taxpayers 65 years or older.
Starting with tax year 2017, the 10% will apply to all taxpayers.
What Can Be Deducted?
The list of qualifying medical expenses is extensive. For any medical condition, it includes the cost of:
Items needed for the above purposes, including:
If you want to deduct medical expenses, they must alleviate or prevent a physical or mental defect or illness. You can't deduct expenses that simply benefit general health, like vitamins or a vacation.
You can deduct these medical expenses:
Cost of medical care from any of these types of practitioners:
Psychoanalysts giving medical care
Other qualified medical practitioners
Transportation costs to and from medical care. If you drive your own car, the deduction is 24 cents per mile in 2012.
Amounts you paid for qualified long-term care services
Limited amounts you paid for any qualified long-term care insurance contracts
Medical insurance premium -- You can't deduct pre-tax salary contributions you make to an employer-sponsored health insurance plan.
Amounts you pay if not covered by Social Security for:
Medicare B supplemental insurance
Medicare D insurance
Medicare A premiums
You usually can't deduct premiums you pay for certain types of policies. This is true of policies with benefits that aren't tied to the actual cost of the medical care you received. These policies:
Pay you a certain amount (Ex: policy that pays you $200 a day while hospitalized)
Pay you for lost earnings
Pay a flat amount for the loss of a limb or eyesight
Contributions you make to a health savings account (HSA) aren’t medical expenses. They’re an adjustment to income. So, you can deduct all of your qualifying HSA contributions, even if you don't itemize deductions.
To learn more, see Form 8889 instructions at www.irs.gov.
The required contributions you make to state disability-benefit funds might not be medical expenses limited by the 7.50% rule. This is true if you’re a resident of:
Instead, include these payments as part of your state tax deduction on Schedule A.
Whose Medical Expenses Can You Include On Your Return?
You can deduct medical expenses for anyone who qualifies as your spouse or dependent when either:
The service was provided
The bill was paid
If you're divorced, you can deduct any qualifying bills you pay for your children as a medical expense. This applies even if your former spouse claims your children as dependents.
You can also deduct medical expenses you pay for any other person who:
Qualifies as your dependent
Would qualify as your dependent except that person:
Files a joint return
Has a gross income that's more than $3,800
When Do Payments Have To Be Made To Be Deductible?
You can include only the medical and dental expenses you paid in the current tax year. It doesn't matter when you received the services.
The payment dates for expenses include:
Check -- day you mail or deliver the check
Online or phone -- date reported on the statement showing when you made the payment
Credit card -- date the charge is made, not the date you pay the credit card bill
What Are Some Expenses Not Considered Deductible Medical Expenses?
Nondeductible expenses include:
Cosmetic surgery not related to any of these:
Medicare tax on wages and tips paid as part of the self-employment tax or household employment taxes
Nursing care for a healthy baby
Usually, drugs not approved by the FDA
Funeral, burial, or cremation costs
To learn more, see Publication 502: Medical and Dental Expenses at www.irs.gov.