How to Claim a Medical Expense Tax Deduction

Posted by Kristen on March 6, 2013

Medical bills and health related expenses can really add up throughout the year. Having to pay for medical costs, dental costs, and health insurance is a huge portion of where many people’s income goes, especially for families. And it shouldn’t come as too much of a surprise that astronomical medical bills are the cause of many people drowning in debt.

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Photo Courtesy: Kristen

But the one slight ray of sunshine is you may be able to deduct some of your medical expenses as well as health insurance costs while you are filing your taxes this year. Before you begin, you need to be aware when you qualify for being able to deduct costs and if so, what qualifies as a purchase or cost that you can deduct. You may be surprised to hear there are a lot more than probably expected. On the other hand, it is also important to keep in mind what you cannot deduct to prevent any mistakes or even an audit from the IRS. And if you are self-employed and pay for your health insurance, you may be able to deduct those costs as well. Here is a guide to deducting these medical expenses.

Deduction of Medical and Dental Expenses

You may be able to deduct some of the medical and dental expenses you pay for yourself, your spouse, and your dependents for the year. These costs can be deducted if they end up being more than 7.5 percent of your adjusted gross income for 2012. The healthcare reform law raises the threshold amount from 7.5% to 10% for the 2013 tax year.

These deductions can be from a variety of procedures, supplies, visits, and care that you may not have even realized. I was shocked to hear that it wasn’t only basic medical care costs that you can deduct. You can actually deduct dozens of costs, some minor and some major. If you’re like me, many of these deductions may surprise you.

Tax Deductible Medical Expense List

Here is a list of some of the possible medical expense tax deductions you might be able to qualify for:

  • Besides general care doctors and physicians, you can also deduct care from psychiatrists, psychologists, chiropractic care, dental exams and procedures, and other nontraditional doctors.
  • Any treatment for drug and alcohol abuse
  • The in-patient treatment for alcoholism and/or drug abuse treatment including lodging and meals during the time seeking treatment
  • Acupuncture treatments
  • Any legal costs that may have occurred to try to authorize the treatment of a mental illness
  • Extra living expenses you endured such as rent or utilities to accommodate space for a nurse or care attendant
  • Household help for nursing care services
  • Lab fees
  • The costs of removing lead based paint from a home when a child has been previously diagnosed with lead poisoning or any other illness resulting from exposure to lead
  • Prescription medicine
  • False teeth
  • Prescription birth control pills
  • Air conditioner that is vital to relieve certain allergies or other respiratory problems
  • Guide dogs for visually impaired persons or hearing impaired persons
  • Lifetime care advance payments
  • The cost of meals, lodging, and care for nursing home services
  • Reading or prescription eyeglasses and contact lenses including any additional supplies for contact lenses
  • Hearing aids
  • Any mattress or sleeping aid that is purchased to alleviate diagnosed arthritic conditions
  • Braille books and magazines for use of a visually-impaired person
  • If you are participating in a weight loss plan from a specific disease diagnosed, such as obesity, you can deduct costs of your meals, fitness costs, and a gym or health club membership
  • Crutches
  • A specialized television with equipment to help vision-impaired persons or a specialized telephone to help hearing-impaired persons
  • X-Ray services
  • A whirlpool bath recommended by a doctor to alleviate the pain of a condition or disease
  • To assist with the mental wellbeing, a wig for any man or women that has been diagnosed with a disease that caused hair loss as a result
  • Therapeutic swimming recommended by a doctor
  • Reclining chair recommended by a doctor to help with a cardiac condition
  • Travel expenses and conference admission for a chronically ill person or a parent of a chronically ill child to learn about medical treatments
  • Transportation costs to and from medical treatment including costs of a taxi, bus, train, or ambulance as well as gas, oil, tolls, and parking fees if you’re driving

Once you pass the adjusted gross income threshold, medical expenses are claimed as an Itemized Deduction on Schedule A.

What You Cannot Deduct

There are things you cannot deduct though. You can’t deduct any over-the-counter medicine, nicotine gum, nicotine patches, toiletries or cosmetics, cosmetic surgery, Funeral or burial expenses, expenses reimbursed with a Flexible Spending Account, or any medical expenses that did not occur during this past year. If you had to remove lead based paint, which can be deducted, you may not deduct the cost of repainting the area. If you are traveling to and attending a conference to learn about treatment for a chronic disease for you or your child, you can deduct those costs, but not the costs of meals and lodging while attending. Wigs are covered, but hair transplants are not.

Self-Employed Health Insurance Deduction

Besides being able to deduct a large amount of medical and dental expenses, you can also possibly deduct the cost of your health insurance. If you are self-employed, you can deduct any costs you paid for the medical, dental, and long-term care insurance coverage you pay for yourself, your spouse, and your dependents.

  • You can only deduct any months you were not eligible to take part of an employee health care plan. For example, if you’re self-employed but you are eligible to be covered under your spouse’s company’s insurance plan, then you are not eligible. Also, if you worked 6 months out of the year for a company that offered health insurance, even if you didn’t take it, you are not eligible for those 6 months since the option was available to you.
  • Your deduction can’t be greater than the income you are earning from your self-employment business.

Is there anything that surprises you that you are able to deduct from the medical and dental expenses? If you’re self-employed, do you deduct your health insurance costs?



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Comments to How to Claim a Medical Expense Tax Deduction

  1. I was skimming the list and noticed “lifetime care advance payments”. Curious if that could apply to a long-term care insurance policy my mother-in-law purchased, I looked at the IRS guidelines and there it was…deductible. At very little income this is huge! Thanks, and let me know if anyone has had any hangups deducting LT care insurance.

    Duke

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