Medical Expense Deductions Available and the New 10% Expense Threshold

Health Care

On the medical front, there’s good news. Though medical expenses cost a bundle, 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, here’s a little bad news: In the past you could deduct those medical expenses that exceed 7.5% of your adjusted gross income; beginning in 2013, that threshold has been raised to 10%.

That means your expenses have to be higher than before in order to take the medical expense deduction.

If either you or your spouse are 65 or older in 2013, you will have some relief, since the new 10% threshold won’t take effect for you until 2017.

Don’t worry about calculating your medical expense deduction.  TurboTax will ask you questions about your medical expenses and give you the medical expense deduction you’re eligible for.

Don’t forget to include these often overlooked medical expenses:

  • Travel costs to and from doctors, medical treatments, and hospitals. For 2013 the mileage rate deduction is 24 cents a mile.
  • 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

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 them on your tax return.

And you can claim medical expenses you pay for your parents if you furnish over half of their support. If you paid bills for a dependent who died during the year, you can claim those expenses as well.

With careful planning about when medical expenses are incurred and paid, you may be able to concentrate them in alternating years. That way, you can maximize your deductions in one year, and then not claim the deduction the next year.

Comments (13) Leave your comment

  1. At the beginning of 2014 I paid for private student healthcare while I was going to school and then starting September 2014 I enrolled in the government marketplace health care. I have received my 1095-A form from the marketplace for my current insurance and have entered it into turbotax. Unfortunately private healthcare plans that are not through the marketplace do not send you this tax form to enter into turbotax. My question is: How do I enter in the private student healthcare coverage I paid for at the beginning of 2014 without receiving the 1095-A form? Where do I enter the cost I paid for student healthcare on turbotax for 2014 tax year?

  2. I pay my insurance through my school which is under the AHP and is under the MEC program. How do I enter the yearly amount I paid for insurance? I have called your preps and haven’t been able to speak with someone. Please help.

  3. Our family pays a deductible of $600 per person before our insurance begins to reimburse.
    Is that something that can be added to the 10% of adjusted gross income tally?
    Also, what about our annual premium? Can that be added to the 10% tally too? We are not self employed

    1. I pay Blue Cross Blue Shield inshurence also dental inshurence , can I deduct full amount for the year and summary with year expenses

  4. I have used Turbo Tax for several years and plan to use it in 2014. I want to deduct my service dog’s expenses, but cannot reach the IRS or find out any information on who/if/ where the dog needs to be certifed in advance. I have a letter of disability from an medical doctor. The IRS is very vague. Should I just collect all the expenses. If filing as married what is our personal deduction? I assume medical expenses including all of the service dog’s expenses will exceed this, but am not sure. Thanks, William

    1. Hi William,
      Yes, you should collect your receipts. You will be able to deduct medical expenses that exceed 10% of your adjusted gross income (7.5% if 65 and older). TurboTax will accurately calculate your medical expense deduction for you based on you answers to simple questions about you. Here is a link I found regarding certifying your dog
      http://www.nsarco.com/
      Thank you,
      Lisa Greene-Lewis

  5. are full premiums for health insurance deductible if you itemize and are receiving a government subsidy for the premiums or is it only the difference for the premiums less the govt subsidy in 2014 and beyond

    1. are full premiums for health insurance deductible if you itemize and are receiving a government subsidy for the premiums or is it only the difference for the premiums less the govt subsidy in 2014 and beyond

      1. Hi Dennis,
        You would be able to deduct the amount you paid for the premium, but not the amount of the subsidy.
        Thank you,
        Lisa Greene-Lewis

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