Medical expense tax isn’t just limited to yourself. If any of your family members or dependents are going through medical procedures with exorbitant costs, you can claim that money. You will be able to revive qualified medical expenses that cross more than 7.5% of your gross income.
These expenses include hospital visits, injury, health and dental premium insurance, recovery from a grave illness, wheelchairs, crutches, glasses, and contact lenses. The money you spend on all these is tax-deductible to a certain extent. Now, let’s take a look at how this works and how you can claim some of your money back. Check out Beem for guidance on tax filing.
What Is the Medical Expense Deduction?
When you are filing tax returns this year, you have a chance to receive some of the money back. There’s a catch here though. You can get the qualified, unreimbursed medical expenses but they have to be more than 7.5% of your last year’s adjusted gross income.
For example, say your adjusted gross income is $80,000. If your medical expenses have exceeded more than $6,000 or 7.5% of your AGI, then you are qualified for reimbursement. Let’s say you’ve spent $20,000 on medical expenses like medicines and dentures or healing a fracture wound. Out of the $20,000, you will be reimbursed with $17,000.
What Kind of Medical Expenses Are Tax Deductible?
- When you’re traveling to and fro from your home to the hospital, these transportation charges can also be deducted.
- Prescription drugs and insulin.
- Acupuncture.
- Alcohol and drug addiction programs, smoke addiction programs, and rehab centers.
- If your obesity has become a major health risk and your doctor has advised you to lose weight, then weight loss programs are also tax deductible.
- The transportation and admission expenses during a seminar or press conference of a health program.
- Dentures, crutches, hearing aids, and wheelchairs.
- Payments to doctors, surgeons, physicians, psychologists, and other healthcare professionals.
Other Rules for Medical Expense Deduction
- If you are filing taxes this year, then the only medical expenses you can file are the ones you paid during the previous year or that year itself
- If the IRS already reimbursed an expense, then you can’t include this again in your tax return
What Can’t Be Deducted?
- Makeup, skincare products, toiletries, and toothpaste.
- Most cosmetic surgeries aren’t tax deductible.
- Funeral or burial expenses.
- Over-the-counter medicines.
- Holidays and vacations.
- If you’re trying to quit smoking, then only addiction programs are deductible. Nicotine patches and gums aren’t tax deductible.
Also Know About : Medical debt
How to Claim the Medical Expense Deduction
Filing medical tax returns is a time-consuming task. You have to take into account both standard deductions (the fixed amount you have to pay or taxes) and itemized deductions (the AGI amount here differs from person to person).
If your standard deduction is more than your itemized deductions, then you can opt for the former and save a lot of tax prep time. Here are some things you need to keep in mind while claiming your medical expense deduction:
- Use Schedule A: You can do the math with the help of Schedule A and calculate how much you can save and how much you have to pay. If you don’t know how to calculate this, then there are various software calculators that will do the job for you.
- File taxes while keeping your relationship status in mind: If you are married, then you can claim medical tax returns separately as this will give you bigger deductions. However, this is quite a risky step to take considering you may lose other tax breaks and perks.
- Keep good records: The most crucial thing about filing medical tax expenses is to keep track of every penny you spend on healthcare. Whenever you buy something from the pharmacy or visit a hospital, make sure you hang onto all the bills.
- State thresholds for medical expense deduction: Each state has a different percentage when it comes to AGI. Some could save you a lot more money than others. You have to check the AGI threshold of the state you are living in before you file your tax returns.
If you want to know all the exclusive details about medical tax expense deductions, then you can check the IRS Publication 502 official site.
Try Beem’s Tax Calculator to get an accurate estimate of your federal and state tax.
