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Important things to know when deducting medical and dental expenses on your taxes

Updated on April 1, 2012

Medical expenses are one of the leading causes of poverty and bankruptcy in the United States. A few breaks are available for those who have significant medical or dental expenses. However, not all people know what is legally theirs, what medical expenses they are able to claim and deduct when filing taxes and how to do it right. Here are a few important details everyone should know when filing taxes and deducting medical expenses, if they want to do it successfully.

  • To be able to deduct qualifying medical and dental expenses, you have to itemize and use tax Form 1040, Schedule A.
  • While there are many medical costs that are potentially tax-deductible, together they have to add up to more than 7.5% of your adjusted gross income for the year. (You could figure this on Form 1040, Schedule A.) Only after this number is reached, some of the medical expenses could be deducted.
  • You cannot claim the deductions, just because you have received the medical bills. You actually have to pay before you could claim the expenses. You could only claim your medical expenses in the same year you paid for them. Now, keep in mind that date of payment is more important than the date of medical treatment when in comes to taxes. Claim medical deductions in the same year you paid for the treatments.
  • Keep good records. Make a list of doctors, hospitals, clinics, treatment centers and pharmacies that provided services to you. Find their phone numbers and call them to request information for taxes. Most medical facilities are willing to provide records in a matter of a few days. Depending on their policies, you might have to sign a release form. You will need to have receipts and records to substantiate your medical expenses.
  • You can only deduct expenses that came straight out of your pocket.Costs that were paid by insurance or reimbursed to you cannot be claimed. It makes no difference if reimbursement was paid to you directly or to medical organization that provided the service.
  • Know whose medical expenses you can and cannot deduct.Medical expenses for yourself, spouse, children and other dependents usually qualify for tax deductions. In some cases, divorced or separated parents could file for medical expenses tax deductions even when their child does not live with them. Also, if you have paid for medical treatments or long-term care services provided to your parent or grandparent, you might be able to claim these payments toward the total tax deductible.
  • Know what you could deduct on your taxes.You can deduct expenses primarily paid for the diagnosis, cure, mitigation, treatment or prevention of disease, or treatment affecting any structure or function of the body. Only prescription medication and insulin could be deducted. With a few exceptions, medications purchased over-the counter do not qualify. Lactation supplies is a tax deductible expense. Premiums for medical, dental, long-term care insurance plans and co-pays at time of service are tax deductible.
  • Add up your transportation expenses. One cost of medical care often overlooked is transportation. "You may deduct transportation costs primarily for and essential to medical care that qualify as medical expenses," according to IRS website. If your sole purpose of taking a trip is for medical reasons, then you could deduct the actual cost for taking a taxi, bus, train, plane or ambulance to get there. If you used your own car, you have an options of deducting the actual cost of oil and gas or standard mileage rate. (The rate is 19 cents - 23.5 cents per mile, depending on the time of the year.) Tolls and parking fees are included.

You could read more about filing taxes and deductions avaliable on Internal Revenue Service website here.

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    • profile image

      jenubouka 

      6 years ago

      This is extremely helpful for those who are wondering if they can deduct their medical and dental expenses. Especially the dental....They require either the full payment or your left leg....

      And to remember that it is the ones you paid, not the ones you owe....

    • bankscottage profile image

      bankscottage 

      6 years ago from Pennsylvania

      Nice Summary. Good Hub. Voted useful.

      The 2 biggest issues to deducting medical expenses are:

      1. Medical expenses exceeding 7.5% of of your income. You can only deduct the amount over that 7.5% threshold. That first 7.5% only helps get you to a point that expenses can be deductible. So, the higher your income is, the harder it is to exceed that threshold. The lower your income the more difficult it would be to pay the medical expenses.

      2. Deductions for medical expenses is useful only if you itemize as you point out. But, I believe about 2/3 of filers use the standard deduction. The standard deductions are fairly generous for most filers. As you point out, it isn't when you have the care, it is when you pay the bills. You could try to bunch the expenses into one year by paying bills due in January in the previous December (or vice versa).

      Also,it is important to remember what procedures are not deductible as a medical expense. You cannot deduct cosmetic surgery, such as facelifts, liposuction, etc. Also, dental expenses are deductible except for cosmetic dental procedures such as teeth whitening.

      Glasses and contacts are deductible.

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