Tax Deductible Medical and Dental Expenses


An itemized deduction falls under one of the following categories: Medical and dental expenses, taxes paid, interest, gifts and charity, casualty and theft losses, expenses and miscellaneous deductions. Taxpayers who wish to claim medical and dental expenses must use the itemize deduction option and present documented evidence to substantiate the amount being claim. The itemized deduction option gives the taxpayers a larger total deduction. However, the deduction must not exceed one-half of the taxpayer's adjusted gross income, but in order to qualify, the total expenses claimed must exceed 7.5 per cent of the taxpayer's adjusted gross income.

Qualified medical and dental expenses are deductible for yourself, your spouse and dependents, including anyone you claim as a dependent under a multiple support agreement, but the agreement allows for only one of the people involved to claim the deduction. Expenses paid for a child who receives more than half of support from you are also deductible, however, you are not entitled to a personal exemption for a child who earned in excess of the allowed amount of income.

Medical and dental Expenses for self-employed persons that have a net profit for the tax year, or share in a partnership or a shareholder in an S corporation, may be able to deduct, as an adjustment to income, the total amount paid for medical insurance for yourself, spouse and dependents. This special tax deduction is not deductible for any month you are eligible to participate in any sponsored health plan by your employer or your spouse's employer.

Travel expenses for your medical care are deductible when traveling to the doctor's office or a medical facility for treatment. If you use your car, a flat rate per mile assessment plus the actual expense of operating the car, such as gas, oil, repairs, parking and toll fees are deductible. Cab fares incurred to travel locally to your doctor's office, he cost of a trip out of town to visit a specialist and the cost of transportation to a different climate for health reasons are deductible.

Deductible travel expenses are allowed as a medical deduction under the following conditions: When a doctor prescribes trips to visit a child in an institution, when anyone accompanies an individual for medical care who is unable to travel alone and the cost of travel to medical conferences in order to get the latest information on treatment for a chronically ill person.

Special medical expenses are deductible depending on the services provided. Payments to anyone who is unlicensed, but provided legal medical care and legitimate purchases on the advice of a doctor to benefit you or your dependents' health are deductible. Such purchases include vitamins and nutritional supplements prescribed by a doctor to treat a specific ailment. Expenses incurred by what is considered a non medical treatment such as a massage must be proven as a legitimate medical deduction by the taxpayer.

The entire bill at a hospital or similar medical facility for meals and lodging is deductible. You may also deduct the expense of lodging if you or your dependents' medical treatment is away from home and lodging is necessary in order to receive the treatment provided by a doctor. The lodging must be moderate, with no element of personal pleasure, recreation or vacation. The amount is limited to $100 for you and one other person.

Health insurance premiums paid to cover your medical, dental and hospital expenses, including eyeglasses and prescription drugs are deductible if it is part of your adjusted gross income. This includes your premium for Medicare Part B. Reimbursement and damages from insurance proceeds and Medicare will reduce your medical expenses. If the reimbursement equals or exceeds your medical expenses, your deduction will be reduced to zero.

You may claim medical expenses for yourself, spouse, dependents and anyone you claim as a dependent under a multiple support agreement that is confined to a nursing home or home for the aged. The deduction includes the entire cost of medical care, including meals and lodging. If the person is residing in a nursing home for reasons other than medical, the only deductible cost is the actual medical expenses. This also applies to rest homes and assisted-living facilities. Any non medical expenses are not deductible.

The cost of medical expenses for mentally or physically handicapped dependents attending a special school geared to improve the person's specific needs are deductible. The deduction includes all costs for tuition, transportation, meals and lodging. Schools that qualify must offer programs that teach Braille or lip reading, help cure dyslexia, treat and care for the mentally handicapped and persons with similar handicapped needs.

Improvements to your home that aid in treating a disease, such as adding required equipment, is deductible. However, the deduction is limited to the cost of the equipment or improvement, minus the increase in value to your home.

Deductible medical and dental expenses are the total expenses paid and claimed, less what was reimbursed by insurance or any other source. The outcome is reduced by 7.5 percent of your Adjusted Gross Income.

--Michael Russell

Michael Russell Your Independent guide to Accounting

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