Deductiing Medical Expenses on Your Tax Return


Those expenses that are considered qualifying medical expenses are deductible for tax purposes. Medical expense deductions are claimed on a Schedule A (downloads as a pdf) on a federal form 1040.

Medical expense deductions are claimed on a Schedule A (downloads as a pdf) on a federal form 1040. It’s easy to find since it’s at the very top of the Schedule:

My parents itemize their deductions so they can deduct out of pocket expenses they pay for medical care which exceed 7.5% of their adjusted gross income. Here’s a quick example. Let’s say that their AGI is $50,000. That would mean that they could deduct expenses which exceeded $3,750 (7.5% of $50,000). If their total medical expenses were only $2,000 for the year, that means that they would not receive any deduction ($2,000 less $3,750 is not more than $0). If, however, their total medical expenses were $5,000 for the year, they could deduct $1,250 ($5,000 less $3,750 = $1,250).

But wait, you ask: why 7.5%? Didn’t that medical floor increase as a result of Obamacare? It did for most taxpayers: most taxpayers have a 10% floor for 2015. However, written into the law was a temporary exemption for taxpayers age 65 and older. Those senior taxpayers, like my dad, can continue to deduct total medical expenses that exceed 7.5% of your AGI through the 2016 tax year (this is true for married taxpayers even if just one of you is age 65 or older). Beginning in the tax year 2017, the 10% threshold will apply to everyone, including those over 65.

So, assuming they can claim the deduction, what gets covered?

With respect to my dad’s hospital visit, all of the expenses paid by my parents – and not reimbursed by insurance – for my dad’s care while in the hospital are deductible. That includes his co-pays and services provided by his doctors and nurses. It also includes his medications – even the Mucinex for his lungs which though you can buy it over-the-counter at the pharmacy is deductible because, in this case, it’s prescribed by a doctor. That’s the case for all medications: over-the-counter medications are not deductible as a qualifying medical expense unless prescribed by a doctor (a narrow exception applies to insulin and diabetic supplies).

Source: Tax Lady Forbes 

Click Here Continue Reading Article

Questions About Our Services?

Let us help you! Call us now at 1(866)999-2829

Send Us a Message