Can I deduct mileage to and from the hospital while we have a child in the nicu?

[xmasbaby0]

Yes, mileage to and from the hospital is deductible as a medical expense.

MEDICAL EXPENSES

The medical expense deduction has to meet a rather large threshold before it can affect your return. The amount of medical (including dental, vision, etc.)  expenses that will count toward itemization is the amount that is OVER 7.5% of your adjusted gross income. You should only enter the amount that you paid in 2018—do not include any amounts that were covered by insurance or that are still outstanding. Of course, your medical expenses plus your other itemized deductions still have to exceed your standard deduction before you will see a difference in your tax due or refund.

To enter your medical expenses go to Federal>Deductions and Credits>Medical>Medical Expenses

2018 Standard Deductions:

Single   $12,000  (+ $1600 65 or older)

Married Filing Separately    $12,000  (+ $1300 65 or older)

Married Filing Jointly  $24,000  (+ $1300 each spouse 65 or older)

Head of Household  $18,000  (+ $1600 65 or older)

https://turbotax.intuit.com/tax-tips/health-care/medical-expenses-checklist/L6MkxxlyW

https://ttlc.intuit.com/questions/2895072-can-i-deduct-medical-costs-paid-through-my-hsa-or-msa

https://ttlc.intuit.com/questions/2895188-where-do-i-enter-my-medical-expenses

https://ttlc.intuit.com/questions/2895189-what-kinds-of-medical-expenses-are-deductible

[BMcCalpin]

On the off chance that your insurance policy is an High Deductible Health Plan (HDHP) and you already have a Health Savings Account (HSA), let me note that instead of deducting medical mileage on Schedule A, that you can reimburse yourself for the medical mileage instead.

Let's say that you have 300 miles related to medical mileage. The normal medical mileage deduction in 2018 is 18 cents a mile. This would create a possible deduction of $54.00 (but read all the caveats by xmasbaby0 above).

Instead of adding this to the Medical and Dental Expenses section on Schedule A (where, as xmasbaby0 noted, you may get no deduction at all), you can instead choose to call your HSA administrator and ask that you be reimbursed from your HSA for that $300. The requirements are that your HSA already existed before you made the first drive to the NICU and that you have the cash in your HSA. Of course, if you don't have the cash in the HSA yet, you can delay the reimbursement until you do.

Since you have to put money in the HSA in order to be able to draw it out, you might wonder what the benefit to you would be. The benefit is that you get a tax deduction when you contribute that $300, so it actually costs you less than $300. If you are in the 12% tax bracket, then you are in essence getting a 12% discount on the 18 cents a mile that you spent on gas and wear-and-tear on your car.

In addition, if your employer is contributing to your HSA (many do), then your employer is, in effect, subsidizing your medical mileage with no tax consequence to you.

Which is better, taking the mileage on Schedule A or from your HSA? The tax benefit is the same but ONLY is you are able to use it on Schedule A. Many taxpayers cannot, as xmasbaby0 shows above. But you can always take the tax benefit from your HSA, so the answer would in most cases be "the HSA".

[BMcCalpin]

"If you are in the 12% tax bracket, then you are in essence getting a 12% discount on the 18 cents a mile that you spent on gas and wear-and-tear on your car."

My pedantic nature compels me to note that IF you have an HSA and you are funded it through payroll contributions (you ask your employer to withhold a certain amount from your salary to be sent to your HSA), then if you are in the 12% tax bracket, your benefit is actually MORE than 12% of the contributions to the HSA.

The reason is because your HSA contributions made through your employer not only are not subject to federal income taxes, but are normally not subject to Social Security or Medicare taxes either.

Since you pay 7.65% in SS and Medicare taxes in each dollar of Wages, in this case, you would save a total of 19.65% on each dollar you contribute to the HSA (12% federal income tax and 7.65% for SS and Medicare).

There are a lot of IFs here, but in this case, reimbursing yourself from the HSA would be far better than trying to take the deduction on Schedule A.