Deducting Medical Expenses
Doctor visits, prescriptions, and other medical expenses can quickly pile up, even after your insurance pays its share. Luckily, there’s a built-in tax break to help pay for these expenses, at least if the math works in your favor. This is the medical expense deduction, and it lets you recoup some of the cost of qualifying expenses on your tax return.
First, note that to deduct a medical expense, it has to be an unreimbursed expense. That means if you pay for an expense out-of-pocket but get reimbursed by your insurance company or anyone else, you can’t claim that expense as paid by you.
You may be able to deduct expenses like medical supplies, dental treatments, and insurance premiums. See What Medical Expenses are Deductible? Medical expenses for your spouse and qualifying dependents naturally count too. And if you're 65 or over, the deduction allows a higher percentage of your medical expenses.
Important Tips for Deducting Medical Expenses
First, some ground rules:
- You must claim any expenses the year you paid for them. If you paid by credit card, claim the expense in the year you charged it to your card, not in the year you paid the charge off.
- You must reduce your total medical expenses for the year by reimbursements from an insurance company or other agency, including Medicare. If the reimbursement is for services that are nondeductible, you must still claim the full amount of the reimbursement. If you pay for an expense this year and get reimbursed in a future year, the reimbursement is considered taxable income in the future year.
- If you pay any medical expenses from a Health Savings Account (HSA), Medical Savings Account (MSA), or Flexible Spending Account (FSA), you can’t include these payments when figuring your deduction.
- Make sure to keep any receipts from doctors and pharmacies, bank statements, and credit card statements showing where you paid for services, supplies, and any insurance premiums paid. Keeping track of your expenses will save time and headaches when filing your taxes.
Claiming a Medical Deduction
What expenses can I deduct? You can deduct any expense for the diagnosis, curing, treating, or prevention of disease affecting any part or function of the body. Deducting costs must also either alleviate or prevent a physical or mental defect or illness. Expenses geared more toward general health, like vitamins and vacations, are not deductible.
Is there a dollar limit on claiming a medical deduction? Yes, you can only deduct the amount that exceeds 10% of your adjusted gross income (AGI). If you’re 65 or older, you’re can deduct the amount that exceeds 7.5% of your AGI.
Whose medical expenses can I deduct? You can deduct any medical expense for you, your spouse, and qualifying dependents. If you’re wondering who counts as a qualifying dependent, see Who Can Be Claimed as a Dependent? If you’re claiming expenses for your spouse, you must have been married at the time your spouse received service OR when you paid the expense.
If you’re divorced or legally separated, the expenses paid by each parent for a dependent child can be claimed on separate returns. If you and several other people help cover medical expenses under a multiple support agreement, only the person claiming the dependent can claim the deduction.
If claiming deductions for a deceased taxpayer, the medical expenses are included on the decedent’s final return. You can also include expenses of the decedent’s spouse and dependents, if filing jointly. The expenses must be paid within the one-year period starting the day after death. You may also file an amended return for the deceased claiming the deduction on the previous year’s return.
To claim the medical expense deduction on your 1040.com return, enter your expenses on our Medical Expenses screen. Your expenses will appear on Schedule A in your final return, the form that appears when you’re itemizing expenses. Don’t worry about whether you have enough expenses to itemize: Just add the expenses, and if you have more itemized deductions than the standard deduction, we’ll use that for you automatically.
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