Medical Deductions & Expenses
Medical Deductions & Expenses
This week’s tip is about medical expenses and deductions that some people are not aware of. You may be able to deduct expenses you pay for someone who is not claimed as a dependent. For instance, if you provided over one-half of a parent’s support for the past year, you can include the medical expenses you paid for him or her. You can also deduct some medical expenses paid for, even if you are not ill. In a ruling issued during 2007, the IRS concluded some unreimbursed medical expenses are deductible, even if you incur them when you are not sick. Examples include your annual physicals, body scans, and pregnancy test kits. The medicine you buy without a doctor’s prescription is usually non-deductible; however, items such as crutches, braces, elastic hosiery, and blood sugar tests do qualify as expenses. Home health care items such as walkers, bed and chair lifts, and compression hoses also qualify as expenses. If you, your spouse, or a dependent attend a conference relating to your chronic disease, the registration fee, and travel expenses are deductible.
Below is an excerpt from the IRS about medical expenses:
Medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body.
Medical care expenses include the insurance premiums you paid for policies that cover medical care or for a qualified long-term care insurance policy covering qualified long-term care services. If you are an employee, medical expenses do not include that portion of your premiums treated as paid by your employer under its sponsored group accident or health policy or qualified long-term care insurance policy. Further, medical expenses do not include the premiums that you paid under your employer-sponsored policy under a premium conversion policy; for example, a federal employee participating in the premium conversion program of the Federal Employee Health Benefits (FEHB) program, may not include the premiums paid for the policy as a medical expense.
If you are self-employed and have a net profit for the year, you may be able to deduct (as an adjustment to income) the premiums you paid on a health insurance policy covering medical care including a qualified long-term care insurance policy covering medical care for yourself and your spouse and dependents. You cannot take this deduction for any month in which you were eligible to participate in any subsidized health plan maintained by your employer, your former employer, your spouse’s employer, or your former spouse’s employer. If you do not claim 100% of your self-employed health insurance deduction, you can include the remaining premiums with your other medical expenses as an itemized deduction on Form 1040, Schedule A.
You may not deduct insurance premiums paid by an employer-sponsored health insurance plan (cafeteria plan) unless the premiums are included in Box 1 of your Form W-2 (PDF).
Deductible medical expenses may include but are not limited to:
- Payments of fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners
- Payments for in-patient hospital care or nursing home services, including the cost of meals and lodging charged by the hospital or nursing home
- Payments for acupuncture treatments or inpatient treatment at a center for alcohol or drug addiction, for participation in a smoking-cessation program, and for drugs to alleviate nicotine withdrawal that require a prescription
- Payments to participate in a weight-loss program for a specific disease or diseases, including obesity, diagnosed by a physician but not ordinarily, payments for diet food items or the payment of health club dues
- Payments for insulin and payments for drugs that require a prescription
- Payments for admission and transportation to a medical conference relating to a chronic disease that you, your spouse, or your dependents have (if the costs are primarily for and essential to necessitated medical care). However, you may not deduct the costs for meals and lodging while attending the medical conference
- Payments for false teeth, reading or prescription eyeglasses or contact lenses, hearing aids, crutches, wheelchairs, and for guide dogs for the blind or deaf
- Payments for transportation primarily for and essential to medical care that qualify as medical expenses, such as, payments of the actual fare for a taxi, bus, train, or ambulance or for medical transportation by personal car, the amount of your actual out-of-pocket expenses such as for gas and oil, or the amount of the standard mileage rate for medical expenses, plus the cost of tolls and parking fee.
You may not deduct funeral or burial expenses, over-the-counter medicines, toothpaste, toiletries, cosmetics, a trip or program for the general improvement of your health, or most cosmetic surgery. You may not deduct amounts paid for nicotine gum and nicotine patches, which do not require a prescription.
You may deduct as an expense any medicine or drug that is a prescribed drug (determined without regard to whether such drug is available without a prescription) or is insulin. A “prescription” means a written or electronic order for a medicine or drug that meets the legal requirements of a prescription in the state in which the medical expense is incurred and that is issued by an individual who is legally authorized to issue a prescription in that state.
You can only include the medical expenses you paid during the year. Your total deductible medical expenses for the year must be reduced by any reimbursement of deductible medical expenses. It makes no difference if you receive the reimbursement or if it is paid directly to the doctor, hospital, or other medical providers.
Here are some points to remember:
- Medical expenses paid (family, self, children or other dependents)
- Diagnostic procedures (body scans, pregnancy tests, annual physicals)
- Non-prescription equipment and supplies (crutches, braces, blood sugar tests, and walkers)
- Medical conferences and travel to and from (if relating to your chronic disease)
- Gym memberships (if a doctor gives you a prescription for weight loss, rehab, or to correct an injury, illness, or accident) (You can not already belong to a gym)
- Fees paid to Acupuncturists, Chiropractors, Therapists (if related to a medical condition)
- Medical travel to and from providers (even if accompanied by a caregiver)
- Caregivers who provide assistance at home and work (because of a medical condition)
Call today, don’t delay! See how this affects you. We can be reached at 602-264-9331 and on all social media under azmoneyguy.
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Mr. Hockensmith has been a guest newscaster for national and local TV stations in Phoenix since 1995, broadcasting financial and tax topics to the general pubic. He has written tax and accounting articles for both national and local newspapers and professional journals. He has been a public speaker nationally and locally on tax, accounting, financial planning and economics since 1992. He was a Disaster Reservist at the Federal Emergency Management Agency, for many years after his military service. He served as a Colonel with the US Army, retiring from military service after 36 years in 2008. Early in his accounting career, he was a Accountant and Consultant with Arthur Andersen CPA’s and Ernst & Young CPA’s.
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