03 October 2017

The Medical Expense Deduction

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The Medical Expense Deduction

The Basics

According to the IRS, ?if you itemize your deductions on Form 1040, Schedule A, you may be able to deduct expenses you paid that year for medical care (including dental) for yourself, your spouse, and your dependents. A deduction is allowed only for expenses primarily paid for the prevention or alleviation of a physical or mental defect or illness. Medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or treatment affecting any structure or function of the body. The cost of drugs is deductible only for drugs that require a prescription, except for insulin.?

7.5% Rule

To qualify for the medical expense deduction your total expenses need to total at least 7.5% of your adjusted gross income. This includes any qualifying expenses that you incurred during the tax year, regardless of when the medical services were provided.

Spouse, Children, and Dependents

In addition to your own medical payments, you can also deduct expenses paid for your spouse, children, and dependents. You can deduct the expenses for a dependent even if you are not able to claim them as an exemption on your current tax return. In order to be eligible, the person must qualify as your dependent at the time you paid for their medical expenses.

Travel Costs

One of the most frequently forgotten parts of calculating medical expense deductions are travel costs. The IRS allows you to deduct all expenses related to traveling to and from medical treatments using the standard mileage rate for the year.

Allowable Expenses

The IRS has a whole list of allowable expenses. To view the list download IRS Publication 502.

Claiming the Deduction

When you prepare your federal income tax return you will want to include your total medical expenses (as long as they exceed 7.5% of your adjusted gross income) on Schedule A of your IRS Form 1040.
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