If you or someone you know spends a lot of money on their medical expenses, the cost may qualify as a medical tax deduction. The Internal Revenue Service (IRS) allows healthcare deductions on tax returns that exceed 10 percent of adjusted gross income. It may seem like a large number, but your expenses might just exceed that percentage if you know exactly what qualifies.
Defining Medical Expenses
If the expenses were paid and contributed to alleviate or prevent a physical or mental illness or injury, your expense can be included. The IRS defines medical expenses as the costs of:
- Diagnosis, cure, mitigation, treatment, or prevention of disease, and the treatments affecting any part of function of the body
- Services provided by physicians, surgeons, dentists, and practitioners
- Equipment, supplies, and diagnostic devices needed for the above purposes
Inclusions are broader than what is commonly perceived, however. Ask yourself if the underlying intent of the service you received, the office or care center you drove to, or item you purchased was to maintain or increase the quality of your health.
Some frequent expenses that are often overlooked include:
- Travel Expenses: Traveling to or from medical treatments and appointments and necessary lodging. The IRS will award 17 cents per mile for 2017 taxes.
- Uninsured Treatments: This includes any out-of-pocket health expenses or group treatments such as alcohol or drug counseling and weight loss programs, if they were recommended by a doctor.
- Uninsured Purchases: Items that assist basic functioning, such as contact lenses or glasses, prosthesis, hearing aids, and dentures. Also included are handicap ramps or other accessible changes to your home, wheelchairs and any special needs retrofits, crutches, and service animals.
- Physician Prescribed Costs: This includes anything your doctor suggests you purchase to help with your health, such as a mouth guard for sleep apnea, or an at-home humidifier for breathing problems. The item and the electricity it costs to operate it may qualify as well.
- Outpatient Procedures: Frequent procedures that are tax deductible include laser vision corrective surgery, fertility enhancement, dental treatment, chiropractic adjustments, and intrauterine device insertion or removal.
Whose Medical Expenses Can You Include?
All qualified expenses for you, your spouse, and any dependents and decedent individuals are tax deductible. If they’re legally listed on your tax return, their expenses apply toward the deduction amount requirement.
How to Report your Tax Deductions
Ensure you’re keeping record of your medical and dental expenses, and file them for reference. All medical deductions must be reported on a Schedule A, Form 1040.
To reference a complete list of qualified and unqualified expenses, filing instructions, and guide to medical and dental expense deductions, access the IRS Publication 502 document. Canopy Health is happy to help you with any questions you have about your 2017 tax filing.
Bell, K. (2017, March 15). Spent a Lot on Medical Care? Those Costs May Be Deductible. Retrieved from http://www.bankrate.com/finance/taxes/maximizing-your-medical-deductions-1.aspx
Internal Revenue Service. (2017). Publication 502 Medical and Dental Expenses. Retrieved from https://www.irs.gov/pub/irs-pdf/p502.pdf