Photo credit:Christiaan Triebert.
Medical expenses have to take a pretty big bite out of your budget before you can use them to reduce your incometax liability. By the time you add up all the medical expenses you can count, however, including insurance, you might find they cost an arm and a legto qualify. Not to mention, the Affordable Care Acthasn't made filing taxes this year any easier.
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Can you deduct medical expenses on your taxes?You can deduct medical expenses to the extent they exceed 10 percent of your adjusted gross income -- that is, your gross income minus a handful of specific adjustments such as traditional retirement plan contributions and one-half ofself-employment tax. That threshold is reduced to 7.5% if you or your spouse is 65 years of age or older.
Let's say you make $50,000 and meet the requirement for a 7.5% deduction. Your AGImultiplied by 7.5% equals $3,750 (your "floor"). If you had medical expenses of $5,000, you could deduct $1,250 as an itemized deduction on your tax return, assuming you had enough otheritemized deductionsto make it worthwhile.
What can be deductedYou can deduct most costs of medical care and insurance for yourself and your dependents. Deduct expenses in the year you pay them, even if you only mail the check or put it on your credit card before the year ends. Include the costs of:
- Office visits to physicians, surgeons, dentists, chiropractors, Christian Science practitioners, and other medical professionals
- Medical insurance premiums (if you're self-employed, deduct them as an income adjustment, not subject to the 7.5% floor)
- Long-term care insurance premiums, up to certain limits
- Long-term care
- Alcohol and drug treatment programs
- Ambulance service
- Body scan
- Modifications to your home for medical care, such as wheelchair ramps
- Nursing supplies, such as breast pumps
- Fertility treatments, pregnancy test kits and sterilization
- Diabetic supplies, such as blood sugar test kits
- Hearing aids
- Glasses, contacts
- Cosmetic surgery required as a result of a disease or accident
- Removing lead-based paint from a surface in poor repair that is within the reach of a child
- Admission and transportation to a conference concerning a chronic condition of yourself or someone in your family
- Psychiatric care
- Weight-reduction programs prescribed by a physician, not including the cost of food
What you can't deduct
- Funeral expenses
- Cosmetic surgery not for medical reasons, such as a face lift
- Activities your doctor recommends to improve your general health, such as a vacation or dancing lessons
- Any illegal treatments or substances
- Nutritional supplements
- Nonprescription drugs, such as aspirin
Your health is hugely important, but maintaining it can also put a dent in your income. Find out if it makes sense to deduct your medical expenses for the year so you can remain physically and financially healthy.
This article originally appeared on gobankingrates.com.
The article 19 Medical Expenses You Can Deduct From Your Taxes originally appeared on Fool.com.
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