Deduct It: Medical Expenses
If you had a tough year when it came to your physical health, there may be good news for your taxes. The medical expense deduction is available for unreimbursed medical and dental expenses.
You don’t have to have a chronic illness or meet special criteria, but you do need to have spent a significant amount of money. That’s why sometimes people will try and lump large medical purchases (like braces) into a single tax year. In order to deduct these expenses, you must meet the threshold.
Threshold for deducting medical expenses
- If you are under the age of 65, you can only deduct total medical expenses to the extent your expenses exceed 10% of your adjusted gross income for the tax year. (Example: you made $30,000; and had $4,000 in unreimbursed medical expenses you can claim a $1,000 medical expense deduction.)
- If either you or your spouse is 65 and over at the end of the tax year, you may deduct your total medical expenses that exceed 7.5% of your adjusted gross income through the 2016 tax year. This is true even if you and your spouse file separate returns.
Whose Medical Expenses are Deductible
Do you have a spouse or dependents? You can claim their medical expenses along with your own. You can even include in your medical expenses amounts paid for individuals that would have been your dependent except that:
- Their gross income exceeds their personal exemption,
- They filed a joint tax return,
- They are your child but not a dependent due to divorce or separation, or
- You, or the your spouse if filing jointly, could be claimed as a dependent on someone else’s tax return
Proof of Expenses
If the IRS comes knocking, you want to be able to adequately prove your expenses. To this end, it is very important for you to keep records that show:
- The name and address of each medical care provider
- The amount and date of each payment
- A description of the medical care received
- Who received the care, and
- The nature and purpose of the medical expenses.
What Expenses are Deductible
Deductible medical expenses include the costs of diagnosis, cure, mitigation, treatment or prevention of disease, and the costs for treatments affecting any part or function of the body.
So what does that mean? Let’s look at some examples to get a better idea of what expenses are deductible.
Common deductible medical expenses include:
- Medical services fees (from doctors, dentists, surgeons, specialists and other medical practitioners)
- Travel costs to receive medical care including an ambulance service, planes, trains and automobiles (either the actual costs or standard mileage rate for your own car)
- Medical and hospital insurance premiums
- Hospital service fees (lab work, therapy, nursing services, surgery, x-rays, etc.)
- Birth control pill prescribed by the doctor, fertility enhancement, breast pumps and supplies,
- Hearing aids, guide dog, crutches, artificial limbs, eyeglasses, contact lenses, bandages
- Cost of special, medically necessary equipment installed in home, such as a walk-in-tub and handrails. If the installation adds value to the home, the deductible medical expenses is reduced by the increase in value to the property. If the value of the property is not increased, the entire cost is a deductible medical expense.
Whether a medical expense is deductible is not always clear. The further removed from actual treatment, the more strenuous the IRS gets with its requirements to deduct. For example, a pool or special foods and beverages are deductible only in very limited circumstances. Similarly, wigs or hair transplants are only deductible in some situations.
For a look at more of the stranger medical and other deductions, take a peek at “The Strange Deduction Hall of Fame.”
Learn more about HSA tax deductions, including deducting medical expenses paid from an HSA account, with advice from the tax experts at H&R Block.
Lean more about deducting car loan interest with help from the tax experts at H&R Block.
Can you claim both a standardized deduction and itemized expenses? Learn more from the tax experts at H&R Block.
Can you claim a tax deduction if you use a cell phone for business purposes? Learn more from the tax experts at H&R Block.