J. William Seabrooke CPA P.C.

There may be additional medical and dental expense tax deduction benefits that are available to you if you itemize your deductions on Schedule A.  The best reference on this subject is IRS Publication 502 (“Medical and Dental Expenses”).  The eligible medical expenses that can be claimed are for the amounts that you paid to physicians, surgeons, dentists and other medical practitioners for yourself, your spouse, and those whom you are claiming as dependents.  These same medical expenses may be claimed if you have a Multiple Support Agreement (IRS Form 2120).

The categories of medical costs that can be claimed are listed and described on pages 5-14 of Publication 502.  Among the deductible costs listed are the costs for abortions, acupuncture, ambulance costs, special medical equipment that is installed in your home, contact lenses, crutches, hearing aids, guide or service animal costs, lodging to obtain medical care (not to exceed $50.00/night per person, and meals IF the meals are consumed in a medical facility.  There are many additional expense categories which are listed in the IRS publication but are not listed in this article. 

All of your qualified medical and dental expenses should be claimed on Schedule A.  However, you will not realize an increase in your total itemized deductions until your medical expenses exceed 7.5% of your “Adjusted Gross Income” (Line #37 on the 2010 Federal Form 1040).

You should also be aware of the fact that claimed medical expenses related to the use of your credit card are deductible in the year that you use your credit card to pay for your medical care, and not in the year in which you actually pay your credit card company (page 3 of IRS Publication 502) for the charges.  Additionally, if you wish to claim transportation costs associated with the use of your car, you should keep accurate, written records of the date, beginning & ending mileage, destination, purpose for the trip, and the person(s) who received the medical care.  Your total round trip mileage is deductible at a rate of $ 16.5/mile.  Be sure to include tolls and parking fees separately.

Additional information on this subject follows:

If you itemize your deductions on Form 1040, Schedule A, you may be able to deduct expenses you paid in 2010 for medical care – including dental – for yourself, your spouse, and your dependents. Here are six things the IRS wants you to know about medical and dental expenses and other benefits.

You may deduct only the amount by which your total medical care expenses for the year exceed 7.5 percent of your adjusted gross income. You do this calculation on Form 1040, Schedule A in computing the amount deductible.

1. You can only include the medical expenses you paid during the year. Your total medical expenses for the year must be reduced by any reimbursement. It makes no difference if you receive the reimbursement or if it is paid directly to the doctor or hospital.
2. You may include qualified medical expenses you pay for yourself, your spouse, and your dependents, including a person you claim as a dependent under a multiple support agreement. If either parent claims a child as a dependent under the rules for divorced or separated parents, each parent may deduct the medical expenses he or she actually pays for the child. You can also deduct medical expenses you paid for someone who would have qualified as your dependent except that the person didn’t meet the gross income or joint return test.
3. A deduction is allowed only for expenses primarily paid for the prevention or alleviation of a physical or mental defect or illness. Medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or treatment affecting any structure or function of the body. The cost of drugs is deductible only for drugs that require a prescription except for insulin.
4. You may deduct transportation costs primarily for and essential to medical care that qualify as medical expenses. The actual fare for a taxi, bus, train, or ambulance may be deducted. If you use your car for medical transportation, you can deduct actual out-of-pocket expenses such as gas and oil, or you can deduct the standard mileage rate for medical expenses. With either method you may include tolls and parking fees.
5. Distributions from Health Savings Accounts and withdrawals from Flexible Spending Arrangements may be tax free if you pay qualified medical expenses.

For additional information on medical deductions and benefits, see Publication 502, Medical and Dental Expenses or Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans, available at http://www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

Links:

• Publication 502, Medical and Dental Expenses (PDF)
• Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans (PDF)