We get questions every year about medical tax deductions. The IRS published this quick set of guidelines, in addition to an interactive tool, that can help you determine what medical and dental expenses you can deduct on your tax return.
- Itemize. You can only claim your medical expenses that you paid for in 2015 if you itemize deductions on your federal tax return. In other words, unless you itemize your deductions, you won’t get a medical tax deduction.
- Income. Include all qualified medical costs that you paid for during the year, however, you only realize a tax benefit when your total amount is more than 10 percent of your adjusted gross income.
- Temporary Threshold for Age 65. If you or your spouse is age 65 or older, then it’s 7.5 percent of your adjusted gross income. This exception applies through Dec. 31, 2016.
- Qualifying Expenses. You can include as a medical tax deduction most medical and dental costs that you paid for yourself, your spouse and your dependents including:
- The costs of diagnosing, treating, easing or preventing disease.
- The costs you pay for prescription drugs and insulin.
- The costs you pay for insurance premiums for policies that cover medical care qualify.
- Some long-term care insurance costs.
Exceptions and special rules apply. Costs reimbursed by insurance or other sources normally do not qualify for a deduction. For more examples of costs you can and can’t deduct, see IRS Publication 502, Medical and Dental Expenses. You can get it on IRS.gov/forms anytime.
- Travel Costs Count. You may be able to deduct travel costs you pay for medical care as a medical tax deduction. This includes costs such as public transportation, ambulance service, tolls and parking fees. If you use your car, you can deduct either the actual costs or the standard mileage rate for medical travel. The rate is 23 cents per mile for 2015.
- No Double Benefit. You can’t claim a medical tax deduction for medical expenses paid with funds from your Health Savings Accounts or Flexible Spending Arrangements. Amounts paid with funds from those plans are usually tax-free.
- Use the Tool. Use the Interactive Tax Assistant tool on IRS.gov to see if you can deduct your expenses as medical tax deductions. It can answer many of your questions on a wide range of tax topics including the health care law.
Source: IRS Tax Tips
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