Q: I was diagnosed cancer with this year, and am currently receiving treatments. Will this have any affect on my tax situation?
A: I am sorry to hear about your diagnosis, but hopefully this information will help you. If you have been diagnosed with cancer or any disease and you are receiving medical treatments you may be able to lower your taxable income by deducting the medical expenses you paid as a medical expense deduction.
First, what you need to know is that you have to be able to itemize your tax deductions instead of taking the standard deduction. For 2016, if your itemized deductions are more than the standard deduction of $6300 ($12,600 married filing jointly), you may be able to deduct your medical expenses if they are more than 10% of your adjusted gross income (7.5% if 65 and older). So if your adjusted gross income is $50,000 then your medical expenses that are more than $5,000 (10% x $50,000) may be able to be deducted. That may seem like a lot, but many taxpayers find that their medical expenses can really add up.
Here are just a few expenses you may have paid that you may be able to deduct as medical expenses:
- Doctor visits
- Radiology and X-rays
- Cancer treatments like Chemotherapy and Radiation Therapy
- In home care
- Hospital stays
- Reconstructive surgery
- Wigs if purchased for chemotherapy-induced hair loss
- Prescription medication
- Cost for transportation essential to medical care, including lodging at $50 a day
- Premium payments for private medical plans
Although there are a few requirements that you have to meet in order to deduct medical expenses, it is very easy for medical expenses to add up so you are able to get some possible relief on your taxes for the money you have paid.
*Note, if you are self-employed you can deduct your medical insurance premiums you paid as a business expense. The premiums do not have to meet the itemized deduction and threshold requirement.
Don’t worry about knowing the tax rules for claiming medical expense deductions. TurboTax ask simple tax questions and will give you the tax deductions you are eligible for based on your entries.