Medical costs seem to increase every year. Uncle Sam can be there to foot some of the doctor bills, but you need to make sure you know and follow the rules.
The Internal Revenue Service (IRS) lets you deduct medical costs on your 2012 tax return as long as they are more than 7.5 percent of your adjusted gross income (AGI). For the 2013 tax year, your medical expenses must exceed 10 percent of your AGI. This target may seem unattainable at first glance, but with a little tax triage you might just meet it.
Don’t overlook the medical expenses of everyone listed on your tax return. Medical and dental bills for you, your spouse and your dependents all count towards reaching the allowable deduction limit. You might even be able to count some medical expenses you paid for a parent, even if Mom or Dad isn’t considered your dependent for exemption purposes.
And while it’s not something we want to think about, don’t forget about medical bills you paid for a deceased dependent in the year they were paid, whether before or after the person passed away.
Here are several often overlooked medical deductions:
- Travel expenses to and from medical treatments. The IRS evaluates the standard cents-per-mile allowance each year. Because of a mid-year inflation adjustment in 2012, you can deduct eligible medical travel at 23 cents per mile. For 2013, the medical travel rate is 24 cents per mile.
- Insurance payments from already-taxed income. This includes the cost of long-term care insurance, up to certain limits based on your age.
- Uninsured medical treatments, such as an extra pair of eyeglasses or set of contact lenses, false teeth, hearing aids and artificial limbs.
- Costs of alcohol or drug-abuse treatments can be counted on your Schedule A.
- Laser vision corrective surgery is a tax-allowable procedure.
- Medically necessary costs prescribed by a physician. That means if your doctor told you to add a humidifier to your home’s heating and air-conditioning system to relieve your chronic breathing problems, the device — and additional electricity costs to run it — could be at least partly deductible.
- Some medical conference costs. You can count admission and transportation expenses to the conference if it concerns a chronic illness suffered by you, your spouse or a dependent. Meals and lodging costs while at the seminar, however, are not deductible.
Health-conscious taxpayers also have a friend in the IRS. Weight-loss programs, in some instances, now might count as a deductible medical cost, joining the stop-smoking programs the agency approved earlier.
But don’t try to cheat on your calorie intake or the IRS. The diet program must be medically necessary. Acceptable situations include, for example, when a doctor recommends the regimen to reduce the health risks of obesity or hypertension.
To take full advantage of the complex array of medical deductions, consult a tax professional.
- Seven Important Tax Facts About Medical and Dental Expenses (plymouthincometax.wordpress.com)
- IRS reminds you that Medical Expenses are sometimes Deductible (clarksvilleonline.com)
JDKatz, P.C. is a full-service law firm focused on tax law and estate planning. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.