If you’re itemizing deductions, the IRS generally allows you a medical expenses deduction if you have unreimbursed expenses that are more than 7.5% of your adjusted gross income for tax years 2017 or 2018. You can deduct the cost of care from several types of practitioners at various stages of care.
Keep in mind, due to Tax Cuts and Jobs Act tax reform, the 7.5% threshold applies to tax years 2017 and 2018. After 2018, the floor returns to 10%. Review changes to medical expense deduction from tax reform. To understand what costs are covered as a deduction, read on.
What can I deduct?
For any medical condition, it includes the unreimbursed cost of:
- Items needed for the above purposes, including:
- Diagnostic devices
If you want to deduct medical expenses, they must alleviate or prevent a physical or mental defect or illness. You can’t deduct expenses that simply benefit general health, like vitamins or a vacation.
You can deduct these medical expenses:
Cost of medical care from any of these types of practitioners:
- Eye doctors
- Medical doctors
- Occupational therapists
- Osteopathic doctors
- Physical therapists
- Psychoanalysts giving medical care
- Other qualified medical practitioners
- Transportation costs to and from medical care. If you drive your own car, the deduction is 17 cents per mile in 2017 and 18 cents per mile in 2018.
- Prescription medicines
- Amounts you paid for qualified long-term care services
- Limited amounts you paid for any qualified long-term care insurance contracts
- Medical insurance premium — You can’t deduct pre-tax salary contributions you make to an employer-sponsored health insurance plan.
- Amounts you pay for:
- Medicare A premiums (usually free for individuals covered by Social Security)
- Medicare B supplemental insurance
- Medicare D insurance
- Medicare supplemental insurance premiums
You usually can’t deduct premiums you pay for certain types of policies that aren’t tied to the actual cost of the medical care you received. These policies include those that:
- Pay you a certain amount (Ex: policy that pays you $200 a day while hospitalized)
- Pay you for lost earnings
- Pay a flat amount for the loss of a limb or eyesight
Contributions you make to a health savings account (HSA) aren’t medical expenses. For employer-sponsored plans, HSA contributions are made pre-tax. Otherwise, contributions are deducted “above-the-line” as adjustments to income. Medical expenses paid with HSA distributions are not deductible.
If you’d like to learn more about HSAs, see Form 8889 instructions at www.irs.gov.
Whose medical expenses can you include on your return?
You can deduct medical expenses for anyone who qualifies as your spouse or dependent when either:
- The service was provided
- The bill was paid
If you’re divorced, you can deduct any qualifying bills you pay for your children as a medical expense. This applies even if your former spouse claims your children as dependents.
You can also deduct medical expenses you pay for any other person who:
- Qualifies as your dependent
- Would qualify as your dependent except that person:
- Files a joint return
- Has a gross income that’s more than $4,050
When do payments have to be made to be deductible?
You can include only the medical and dental expenses you paid in the current tax year. It doesn’t matter when you received the services.
The payment dates for expenses paid by the following methods are as follows:
- Payment by check — the day you mail or deliver the check
- Online or phone — the date reported on the statement showing when you made the payment
- Credit card — the date the charge is made, not the date you pay the credit card bill
What are some expenses not considered deductible medical expenses?
Nondeductible expenses include:
- Cosmetic surgery not related to any of these:
- Congenital abnormality
- Medicare tax on wages and tips paid as part of the self-employment tax or household employment taxes
- Nursing care for a healthy baby
- Usually, drugs not approved by the FDA
- Funeral, burial, or cremation costs
To learn more, see Publication 502: Medical and Dental Expenses at www.irs.gov.
Questions About Medical Expense Deductions?
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