Maximize Your Medical Expense Deductions
Medical expenses cost a bundle, even with the help of health insurance, and they rise astronomically year after year. Luckily, medical insurance premiums, co-pays and uncovered medical expenses are deductible as itemized deductions on your tax return, and that can help defray the costs. But before you breathe a sigh of relief, read on.
You can deduct only those medical expenses that exceed 7.5% of your adjusted gross income. Many taxpayers don’t benefit from the deduction because their expenses don’t exceed that threshold.
To see if your medical expenses add up, go through your checkbook, bank statements and credit card statements to see what you paid last year.
Don’t forget to include these often overlooked medical expenses:
• Travel costs to and from doctors, medical treatments, and hospitals. For 2010 the mileage rate deduction is 16.5 cents a mile, and for 2011 it increases to 19 cents.
• Long-term care insurance premiums on qualified policies.
• Medical costs prescribed by a physician, including improvements to your home and medically necessary equipment and the costs to operate it.
• Admission and travel to a medical conference for a chronic illness suffered by you, your spouse or one of your dependents.
• Alcohol and drug abuse treatments and approved stop-smoking programs
• Ongoing costs for seeing-eye dogs and other service animals
• Weight loss programs from treatment of specific diseases (but not programs simply to improve appearance), and health club dues prescribed for a medical condition
• Wigs for cancer patients (but not hair transplants), recliners for cardiac patients, reconstructive breast surgery for breast cancer patients, laser surgery to correct vision, orthopedic shoes for those with foot problems, cosmetic surgery to ease a deformity.
• Remedial reading for a dyslexic child, an attendant to accompany a blind or deaf student, and clarinet lessons prescribed to alleviate sever tooth malocclusion
Be sure you include medical expenses for yourself, your spouse, and everyone else listed on your tax return. If you pay medical expenses for your child, you can claim those expenses even if you do not claim the child on your tax return. And you can claim medical expenses you pay for your parents if you furnish over half of their support. And if you paid bills for a dependent who died during the year, you can claim those expenses as well.
For more information about medical expenses deductions, go to the IRS website and download IRS Publication 502.