Medical care is expensive. Even if you have the most generous health insurance policy in America, you are going to pay a lot of money out of pocket if you have an unforeseen medical emergency, or an event that requires intensive medical treatment or hospitalization. This is why it is important to understand if you CAN claim medical expenses as a tax deduction, and if you SHOULD claim such expenses.
Can You Deduct Medical Expenses?
The IRS describes qualifying medical expenses as “payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body.” These may be medical expenses related to your care, your spouse’s care, or the care of your dependent.
In addition to bills from medical practitioners, hospitalization, and nursing home care, valid medical expenses may include:
- Inpatient drug treatment.
- Weight loss treatment based on a diagnosed medical condition, such as obesity or diabetes.
- Prescription drugs costs.
- Prosthetics, service animals, glasses, wheelchairs, hearing aids, or other paraphernalia designed to alleviate a diagnosed disability.
- Transportation costs directly related to medical care.
- Certain insurance policy premiums or qualified long term care insurance premiums. This does not include health insurance premiums paid by an employer, or that you pay yourself with pre-tax income through your employer’s health insurance. Generally, look to Box 1 of your W-2 form for deductible insurance premium expenses.
Significantly, the following costs do not qualify for a medical expense deduction:
- Expenses that have been reimbursed or paid for by medical insurance.
- Expenses that were paid out of a health savings account, which was already tax-exempt savings.
- Over the counter drugs and medications. This includes over the counter nicotine patches and gum.
- Funeral expenses.
- Wellness programs.
- Cosmetic surgery.
Should You Deduct Medical Expenses?
A taxpayer is only allowed to deduct medical expenses that are greater than 10% of his or her adjusted gross income. Further, you can only claim medical expenses if you choose to itemize your deduction. This means that it is only financially feasible if your medical expenses cause your total deductible expenses to exceed the standard deduction.
The Law Offices of Robert S. Thomas Can Help You
The Law Offices of Robert S. Thomas handles all manner of issues regarding IRS taxation. I have practiced in the areas of tax law for over twenty years and take pride in providing thorough legal advice and tough advocacy. I have a Master of Law Degree (LLM) in Taxation, and am licensed to practice in the United States Tax Court. Contact The Law Offices of Robert S. Thomas at 847-392-5893 for an initial appointment or visit our website today.