Did you know that you may be able to deduct expenses you pay for someone who is not claimed as a dependent? This week’s tip is about medical expenses and deductions that some people are unaware of. For instance, Dave provided over one-half of his mother’s support for the past year, so he can include the medical expenses he paid for her.
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 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 that covers medical care for yourself, your spouse and dependents.
To your advantage, you can also deduct some medical expenses paid for, even if you are not ill. In a ruling issued since 2007, the IRS concluded some unreimbursed medical expenses are deductible, even if you incur them when you are not sick. Examples include your annual physical check-ups, body scans, and pregnancy test kits.
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. Travel costs for medical care or treatments are also deductible, as are the travel costs for a caregiver who goes with you for care or treatment. Bob and Sharon live in Phoenix, Az, and travel to San Diego, where they both grew up, to see their family dentist twice a year, and deduct the travel and treatment costs of the dental trip.
Let’s look at some of the many medical care costs you may be able to deduct.
Deductible medical expenses may include, but are not limited to:
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 provider. Any reimbursement from an employer, or insurance reduces your medical expense deduction.
Non-deductible items are:
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 (unless it’s a result of injury, illness, or physical damage). You may not deduct amounts paid for nicotine gum and nicotine patches, which do not require a prescription.
Important points to remember are:
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