March 28, 2016

What Medical Expenses Can I Deduct?

Medical Expenses: Which Are Tax-Deductible, Which Are Not?

Tax season is upon us! April 18 is fast approaching – which means it’s time to hunker down, scrounge up the receipts, crunch some numbers and fill out all of those dreadful forms. Excited? Well, it might lift your spirits to know that many of your medical expenses from the past year are tax-deductible. Considering how much the average person spends on medical care annually(over $7200 according to Statistic Brain), this could be a real godsend for you and your wallet. Whether you’ve been doing your taxes for years or you’re an amateur, you may be surprised to learn exactly which medical expenses are deductible. The IRS defines “medical expenses” as “costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body”. Sound like a pretty inclusive definition?

What medical expenses are deductible

Deductible Expenses

Keep in mind that these are all out-of-pocket expenses, meaning they have been paid without reimbursement. There are quite a few – so we’ll just touch on the more common ones: This includes any payments (such as co-pays or treatment fees) made to doctors, dentists, optometrists, surgeons, chiropractors, psychologists, or other kinds of medical practitioners

In-Patient Care

Maybe surgery prompted a multi-day stay at the hospital; anything that wasn’t covered can be

Programs

Payments made towards weight-loss programs, drug rehabilitation programs, or any programs used to treat a specific health condition (health club dues don’t count)

Equipment 

Just about anything, from bifocals to breast pumps, is deductible

Prescription Medications

If they required a prescription, then they’re deductible (with the exception of medical marijuana)

Transportation Costs                                                                                                               
Have you paid a lot for gas and tolls while driving to the doctor’s office? Such payments are tax-deductible, as are fares for buses, trains, taxis, and even ambulances

[Some] Insurance Premiums

This will depend on the type of health insurance, but generally, if you bought it (rather than got it through an employer), you can deduct the premium payments

FYI: In order to write off your medical expenses, they must total more than 10 percent of your AGI (adjusted gross income). This means that if your AGI is $75000 and you’ve paid $8000 for medical expenses, you will only receive a tax deduction of $500 ($8000 – $75000 x 0.10). In this scenario, the first $7500 of medical expenses do not get deducted from your taxable income. Additionally, each tax season, you can only deduct medical expenses paid over the previous year. So if you incurred medical expenses before 2015 and did not claim them, you must file an amended tax return (Form 1040X) to reap any benefits.

Non-Deductible Expenses

Here are some common expenses that you can’t claim on your tax return:

General Health Products

This includes things like toothpaste, vitamins, and diet food

Cosmetic Surgeries

Although payments towards reconstructive surgery are deductible

Over-the-Counter Medications

Except for insulin

Child Care

As long as the baby is healthy, payments for nursing or babysitting services are not deductible

Classes

Includes swimming classes, dance classes, aerobics classes – all classes that improve general

Funeral Expenses

So much for honoring the dead

Veterinary Fees

Guess you got Buster fixed for nothing…

If you have more questions about which of your medical expenses are deductible and which are not, the full list is included in IRS Publication 502. When you actually sit down to do your taxes, you may want to use a “medical expenses checklist” (like this one on the TurboTax website) to ensure that you don’t miss anything. Medical expenses add up, so making sure you claim everything you’re allowed to can go a long way.

About the Author
Michael Sepke

Michael Sepke is a student at the University of Chicago and content writer at Dispute.