Posts Tagged ‘medical and dental expenses’

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Deducting Medical and Dental Expenses

Wednesday, February 26th, 2014

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice. 

Deducting Medical and Dental Expenses

 

If you plan to claim a deduction for your medical expenses, there are some new rules this year that may affect your tax return. Here are eight things you should know about the medical and dental expense deduction:

1.   AGI threshold increase.  Starting in 2013, the amount of allowable medical expenses you must exceed before you can claim a deduction is 10 percent of your adjusted gross income. The threshold was 7.5 percent of AGI in prior years.

2.   Temporary exception for age 65.  The AGI threshold is still 7.5 percent of your AGI if you or your spouse is age 65 or older. This exception will apply through Dec. 31, 2016.

3.   You must itemize.  You can only claim your medical and dental expenses if you itemize deductions on your federal tax return. You can’t claim these expenses if you take the standard deduction.

4.   Paid in 2013. You can include only the expenses you paid in 2013. If you paid by check, the day you mailed or delivered the check is usually considered the date of payment.

5.   Costs to include.  You can include most medical or dental costs that you paid for yourself, your spouse and your dependents. Some exceptions and special rules apply. Any costs reimbursed by insurance or other sources don’t qualify for a deduction.

6.   Expenses that qualify.  You can include the costs of diagnosing, treating, easing or preventing disease. The cost of insurance premiums that you pay for policies that cover medical care qualifies, as does the cost of some long-term care insurance. The cost of prescription drugs and insulin also qualify. For more examples of costs you can deduct, see IRS Publication 502, Medical and Dental Expenses.

7.   Travel costs count.  You may be able to claim the cost of travel for medical care. 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 24 cents per mile for 2013.

8.   No double benefit.  You can’t claim a tax deduction for medical and dental expenses you paid with funds from your Health Savings Accounts or Flexible Spending Arrangements. Amounts paid with funds from those plans are usually tax-free.

Publication 502 is available on IRS.gov or you can order it by calling 800-TAX-FORM (800-829-3676).
Additional IRS Resources:

 

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Deducting Medical and Dental Expenses

Thursday, February 3rd, 2011

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: (more…)

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Standard or Itemized Deductions??

Wednesday, March 10th, 2010

This is the time of year when most Americans are becoming more actively engaged in the preparation of their individual Federal income tax returns.  While there are not many options available for reporting income, there could be some opportunities to reduce your taxable income (and directly related income taxes) by carefully reviewing the instructions for the completion of Schedule A (Itemized Deductions) for Federal form 1040.  While there are variances from state to state, most states either allow the same deductions as provided by Federal laws or they require various adjustments.  You can obtain specific details for your Federal tax return deductions by reading the instructions for Schedule A  on the IRS website:  http://www.irs.gov/pub/irs-pdf/i1040sca.pdf 

There are seven major categories:  1)  Medical and Dental Expenses, 2) Taxes You Paid,  3) Interest You Paid, 4)  Gifts to Charity, 5) Casualty and Theft Losses, 6) Job Expenses and Miscellaneous Deductions, and 7) Other Miscellaneous Deductions.

You will only realize a tax benefit from those total medical expenses that are greater that 7 1/2% of your total income (Adjusted Gross Income).  There is a deduction for state and local income taxes for those states that do not have a state income tax (i.e. Florida and Texas).  If you have all of your receipts to document your deductions, you have the option to use either the amounts from the IRS tables or the actual total amount from your receipts.  Large ticket (cost) items such as cars, boats, airplanes, recreational vehicles, etc are additions to the IRS tables.  If you own a home, in addition to your mortgage interest don’t forget to deduct any points that were paid (this amount is usually provided on the Form 1098 that you receive from your mortgage company) plus Mortgage Insurance Premiums (PMI) paid for homes purchased after December 31, 2006.  PMI is required if you had less than 20% equity in your home when you purchased or re-financed it. 

If you and your spouse paid expenses jointly and are filing separate tax returns you should review IRS Publication 504 for guidance on the allocation of these expenses.  Additional information on itemizing deductions from the IRS follows: 

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