Medical expenses that are paid out of pocket — such as deductibles, clinic co-payments, prescription drugs, dental and vision care, and other healthcare costs not covered by insurance — are possible tax breaks.
These include not only expenses for individuals, but for their spouses and any dependents they might claim. In the case of divorce — even if a person’s former spouse claims their children as dependents — unreimbursed medical expenses paid for these children can qualify as deductions.
To deduct out-of-pocket medical expenses, deductions must be itemized and must exceed 10 percent of the filer’s adjusted gross income or AGI (7.5 percent of AGI for people 65 or older, or if a joint return is filed with a spouse who is 65 or older).
Unreimbursed medical expenses that fall into the following categories can be deducted:
Keep in mind that the IRS doesn’t permit deductions of expenses incurred to maintain or benefit a person’s health, such as the cost of nutritional supplements or a vacation. To qualify as deductions, medical expenses must alleviate, prevent, or manage physical or mental illness.
Examples of health practitioners whose fees or treatment-related costs can be deducted include:
Transportation costs related to accessing medical care afford deductions at a rate of 17 cents per mile, and amounts paid for qualified long-term care services can also be deducted (though expenses paid for qualified long-term care insurance can be deducted in only limited amounts).
As for common healthcare related expenses that can’t be deducted, they include but are not limited to:
Premiums paid for certain types of policies that aren’t tied to the actual cost of medical treatment also can’t be deducted:
Contributions made to health savings account (HSA) don’t qualify as deductible medical expenses. For those with employer-sponsored plans, their HSA contributions are made pre-tax. Otherwise, their contributions qualify as income adjustments and are deducted accordingly. HSA distributions used to pay medical expenses are not deductible.
This information represents only a cursory approach to answering some of the most common questions filers have about medical deductions, there are dozens of additional medical deductions for which filers may qualify.
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