Did you spend a big portion of your income on medical care this tax year? Then you may be able to claim the medical expenses deduction.
To qualify, you need to have spent 10% or more of your adjusted gross income on medical expenses. For citizens who are 65 or older, this number is 7.5%.
For those who qualify, the medical expenses deduction can provide you with a significant boost to your efforts to cut your tax bill this year.
Who Qualifies for a Medical Expenses Deduction?
You can claim a deduction for medical expenses for yourself, for a spouse, or for anyone you’re claiming as a dependent on your tax return. Take note that if claiming for anyone other than you or your spouse, you’ll need to claim them as a dependent when you file your taxes.
When claiming someone as a dependent, there are strict rules regarding this, so make sure you refer to the IRS website to check the guidelines before doing this.
Can I Claim Reimbursed Medical Expenses?
The answer is no. If your insurance company reimbursed you for certain medical expenses, you can’t claim them on your tax return.
Only medical expenses that are genuinely considered to be out of pocket may be claimed.
So, if you had a large deductible on your medical insurance policy and had to undergo surgery, you would only be able to claim back the amount you paid out as a deductible, rather than the entire value of the surgery.
You can’t get reimbursed for the same expense twice!
When Can Medical Expenses Be Claimed?
Sometimes you may be charged for medical expenses, but the amount isn’t actually paid until the following tax year.
In this scenario, you would pay when the expense was charged, not when you paid the bill.
Which Medical Expenses are Claimable?
There are a variety of medical expenses eligible to be claimed.
Any payments for diagnosing an illness, preventative treatment, or actual treatment are all eligible to be claimed. These would include obvious expenses, such as visits to your doctor, visits to your dentist, and x-rays. But you can also claim things like the cost of birth control pills.
However, keep in mind that cosmetic surgery is generally not eligible. However, if you received cosmetic surgery to correct a deformity caused by an accident or illness, cosmetic surgery is eligible.
Psychiatric and psychological medical expenses also qualify. If you’re in rehab due to drug abuse or alcoholism, these expenses can be claimed too.
Prescription drugs can be claimed on your tax return, but any over-the-counter medicines aren’t eligible. On the other hand, equipment and supplies bought over the counter are deductible.
- Visits to the chiropractor.
- Laser eye treatment and contact lenses.
- Sexual dysfunction treatment.
- Nursing home expenses.
Are Premiums on My Health Insurance Policy Deductible?
Sometimes they can be if you pay them out of your own pocket.
You could claim back payments made on Medicare A and Medicare B coverage. The same goes for insurance premiums paid on long-term care. In this case, however, there are certain limits that must be considered.
If you see part of your paycheck removed by your employer for the purposes of a health insurance plan offered by your employer, these premiums aren’t eligible for a deduction.
How to Claim the Medical Expense Deduction
Remember, if you file your taxes online, it’s easy to claim a medical expenses tax deduction. They will ask you simple questions about your expenses, tell you which deductions you qualify for, and fill in all the right forms for you.