Ask these questions to help determine whether your health care costs are tax-deductible.
If you incurred medical expenses in the previous year, you could see a lower tax bill or a higher refund when it’s time to file your taxes. To help determine which medical expenses you can deduct from your taxes, Zane Christopher Jr., board member of TaxSlayer LLC, suggests asking yourself these three questions.
1. How much did I spend on health care?
As a taxpayer, if you spend more than a certain percentage of your adjusted gross income on unreimbursed (i.e., paid by you, not your insurance) medical expenses for yourself, your spouse, or your dependents, you can deduct the amount that exceeds that percentage on your tax return. For 2017 and 2018, the threshold is 7.5 percent of your gross adjusted income. So if you make $50,000, you can deduct unreimbursed medical expenses if they total more than $3,750.
2. What health care expenses did I have?
Deductible health care costs are those that qualify as legitimate medical care expenses, which the IRS defines as “payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body.” Deductible medical expenses, which should be listed on Schedule A of your federal tax return, include payments for:
- Traditional and nontraditional medical practitioners
- In-patient hospital care or nursing home services
- Acupuncture treatments
- Inpatient treatment at a center for alcohol or drug addiction
- Participation in a smoking-cessation program
- Participation in a weight-loss program for a disease diagnosed by a physician
- Prescription drugs
- Artificial limbs
- False teeth
- Reading or prescription eyeglasses or contact lenses
- Hearing aids
- Crutches and wheelchairs
- Guide dogs for the blind or deaf
- Health insurance and long-term care insurance premiums
- Transportation to receive medical treatment
- Home improvements related to medical care
Because they aren’t directly related to diagnosing, treating, or preventing disease, expenses that can’t be deducted include health club dues, diet food, household help, funeral expenses, maternity clothes, medicine bought without a prescription, vitamins and nutritional supplements, and cosmetic surgery.
3. Do I have adequate documentation?
To claim medical deductions on your tax return, you must have documentation of qualified expenses. Christopher says expenses should be tracked with canceled checks, statements, and receipts from doctors, pharmacies, and hospitals, as well as pay stubs from employment or retirement checks, if insurance premiums are deducted from them.
Tax deductions for qualified health care costs can help you minimize your tax liability and avoid medical debt, keeping both your body and your wallet in good health. For more information on filing your taxes, visit the Regions Tax Center.
