Medical Expense Deductions
If you itemize your deductions, you can deduct medical and dental expenses if they are paid as prevention, mitigation, diagnosis, or cure of a physical or mental illness.
Medical deductions do not include medical expenses that are cosmetic or beneficial to general health.
The rules are changing if you plan on itemizing medical deductions. If you are under 65 years, you can only deduct your medical expenses that are more than 10% of your adjusted gross income. If you or your spouse are 65 or older or turned 65 during the tax year, you can still deduct the amount of your medical care expenses that is more than 7.5% of your adjusted gross income.
For instance, if you or your spouse are over 65 and your adjusted gross income is $100,000, then your medical expenses have to exceed $7,500 ($100,000 x 7.5%). So, if your medical expenses total $8,000, then you will be able to deduct $500. If you are under 65 years at the end of 2013, your medical expenses will have to exceed $10,000 ($100,000 x 10%) to give you a deduction. TurboTax guides you through these calculations to provide the maximum benefit.
Tip: Under current law for those over 65 years, beginning Jan. 1, 2017 the deduction threshold of 7.5% goes up to 10% of your adjusted gross income.
Here are some commonly asked questions and answers:
Generally you can deduct medical expenses for yourself, your spouse, and your dependents.
You must be married to your spouse at the time your spouse received medical services or at the time you paid the services, and a person must be a dependent at the time the services were provided or when you paid the services.
For more about who is a dependent, see IRS Pub 501, Exemptions, Standard Deduction and Filing Information, Exemptions for Dependents section.
Medical expenses you can deduct include:
- Medical and dental expenses that are primarily for the diagnosis, cure, relief, treatment, or prevention of disease and for the alleviation or prevention of physical or mental defect or illness.
- Immunizations are deductible as they are for the prevention of disease or physical illness, even when obtained for overseas travel.
Medical expenses provided by:
- Eye Doctors
- Medical Doctors
- Osteopathic Doctors
- Physical Therapists
- Other medical practitioners
- Transportation to and from medical appointments
- Parking fees and highway tolls
- Prescription Medicines
- Amounts paid for Qualified Long-Term Insurance
- Medical insurance premiums, except ones paid to an employer-sponsored pre-tax plan. unless the premiums and other expenses paid by the plan are included in box 1 of your W-2.
- Amounts you pay if you are not covered by social security for Medicare B,D, and A
See IRS Publication 502, Medical and Dental Expenses for a complete list of medical expenses.
You cannot deduct costs you pay for:
- Chiropractor fees and message therapy fees unless they are for prevention, mitigation, diagnosis, or cure of a physical illness.
- Health supplements unless recommended by a medical practitioner as treatment for a physician diagnosed medical condition.
- Costs of maternity clothes, babysitting, childcare, nursing for a normal healthy baby, but medical fees you paid to your obstetrician and for your hospital stay are deductible.
- Cost of a gym membership for business, pleasure, to improve your general health, to relieve physical or mental discomfort not related to a particular medical condition or for other social purposes.
Costs of medical seminars and conferences may be a deduction only if they are related to the chronic illness of yourself, your spouse, or your dependent, and deductible expenses must be primarily for the medical care of you, your spouse, or your dependent. The majority of time spent at the conference must be spent attending sessions on medical information.
You can deduct medical and dental care premiums as long as the insurance payments are not paid with pre-tax dollars for an employer-sponsored health savings plan. This money was already deducted from your wages before taxes (it is tax-free). Health savings plans include Flexible Spending Accounts, Health Savings Accounts, and Health Reimbursement Accounts set up by you or your employer to save you money for future medical expenses.
You cannot deduct the medical portion of auto, life, loss of earnings, loss of life, limb or sight, or guaranteed payments.
You cannot deduct premiums for Flexible Spending Accounts, as they use pre-tax money and are already tax-free.
You cannot deduct medical expenses paid with money from pre-tax medical savings plans.
TIP: If available, many taxpayers set up these accounts since they are 100% tax free, and particularly benefit taxpayers who do not qualify for taking medical expenses as an itemized deduction. See IRS Pub 502, Medical and Dental Expenses for more on Flexible Spending Accounts, Health Savings Accounts, and Health Reimbursement Accounts.
Yes, you can deduct your co-pay as long as the co-pay was not paid out of an employer-sponsored tax-free medical savings plan.
If the co-pay is paid from a Flexible Spending, Health Savings, or Health Reimbursement account it is already tax-free and cannot be deducted again.
No. Except for insulin, you cannot deduct non-prescription drugs.
Although controlled substances such as medical marijuana and laetrile may have been legalized by state law, they still violate federal law and cannot be deducted on the federal tax return.
Yes, you can deduct the cost of using your car for medical visits and to pick up medicine, as they is considered a necessary expense for your medical care. You can also deduct the cost of public transportation and taxis to and from medical care.
For car expenses, you can use either the standard mileage rate set each year (TurboTax figures it for you), or actual vehicle expenses (such as gas & oil). Either way, be sure to keep records of each trip, including the date, the mileage driven, and who you saw and the purpose.
You can add actual out-of-pocket expenses, such as parking fees and tolls, whether you use the standard mileage rate or actual expenses for transportation related to medical care. Keep receipts for each expense.
No, you can only include medical and dental expenses in the year they were paid, regardless of when the service was provided and regardless of your accounting method.
The date medical expenses are paid depends on your payment method. If you:
- Pay-by-Check - The day you mail or deliver check is the day the expense is considered paid.
- Pay-by-Phone - The date paid reported on financial institution’s statements.
- Credit Card - The date you are charged, not paid.
For more from the IRS about how you can deduct medical and dental expenses, watch the video below.