In past years, if you itemized your deductions, you could deduct qualified medical and dental expenses to the extent they exceeded 7.5% of your adjusted gross income (AGI). However, beginning January 1, 2013, this threshold was raised to 10%. In this article, we’ll discuss what you need to know to claim a federal income tax deduction for medical and dental expenses.
1) AGI Threshold Increase
The total of your qualified medical and dental expenses must exceed 10% of your AGI to claim a deduction. There’s one exception which we’ll discuss in the next section.
2) Temporary Exception to the 10% AGI Threshold
If married, and one spouse is at least age 65, the threshold remains at 7.5% of AGI until December 31, 2016. Beginning January 1, 2017 the threshold will be 10% for all taxpayers.
3) You Must Itemize
You must itemize your deductions (i.e.; Schedule A) in order to qualify. You cannot use the standard deduction and claim medical and dental expenses.
4) When Are Medical Expenses Considered Paid?
You must have paid medical expenses during the calendar year. If you paid by check, the date you mailed or delivered the check is usually the qualifying date of payment.
5) Qualified Costs And Expenses
You may use any medical or dental costs you paid for yourself, your spouse, and your dependents. However, if you were reimbursed by insurance or another source, your deduction will be reduced by the amount of the reimbursement. In general, any legitimate medical expenses will qualify, including the costs of diagnosing, treating, easing, or preventing disease. This also includes the cost of health and dental insurance premiums and possibly long-term care insurance premiums. Also on the list are eye exams, eye glasses, contact lenses, and eye surgery. The list of qualified expenses is quite extensive. To find everything you’ll need to know about deducting medical and dental expenses, click the following link which will take you to the IRS website and to the specific publication on this subject. To learn more, click: IRS Publication 502.
6) Travel Costs
You may be able to claim the cost of travel for medical care. This includes public transportation, ambulance, tolls, parking fees, etc. If you used your personal automobile, you may be able to deduct 24 cents per mile for 2013.
7) No Double Benefits
If you participate in a Health Savings Account or Flexible Spending Arrangement and you used either to pay for medical expenses, you cannot claim a tax deduction as these funds are usually withdrawn on a tax-free basis.