We have all heard people complain about the high costs of medical expenses. But it might be possible to get a tax deduction for those medical expenses if you qualify. While not all individuals will be able to take advantage of this medical deduction, if properly planned, there could be great tax benefits.
General Information
For 2019, if you are claiming itemized deductions on your 1040 tax return, the medical expense deduction can be claimed if you have unreimbursed medical costs that exceed 10% of your adjusted gross income (AGI). NOTE: The percentage was lowered in 2017 and 2018 to 7.5%, but went back to 10% in 2019 making it slightly harder to use the medical deduction. Any medical costs that exceed the 10% floor are eligible for the medical expense deduction on Schedule A of itemized deductions.
Eligible Medical Expenses
Most individuals think of hospital, doctor expenses, dental services, and prescription drugs when determining their medical costs. However, there might be some items that will qualify as medical costs that you may not have thought of. Below is a few examples:
- Health Insurance Premiums and Long Term Care Insurance Premiums – Payments for a portion or all of your medical insurance premiums out of pocket. You are not able to claim the portion that is paid by an employer or if pre-tax dollars are used.
- Medical Travel – Medical mileage is deductible at 20 cents per mile for 2019 along with tolls and parking expenses. You can also deduct transportation costs from public transport/taxi used to get to medical appointments.
- Programs – The cost of participation in a weight-loss program if undertaken as part of a treatment diagnosed by a physician. Any smoking-cessation programs and/or prescribed drugs to reduce nicotine withdrawal are also deductible.
- Other Medical Costs – Eye exams and eyeglasses are all considered medical expenses. Hearing aids, special telephones, and/or special televisions to assist those individuals with hearing-impairments are deductible as well. The costs for services from nurses and therapists can be a deductible medical expense if it relates to a medical condition and is not for general health.
Planning
If you are able to bunch together elective medical procedures, it could help you to exceed the 10% floor. By moving controllable expenses, like non-urgent medical procedures, elective surgeries, refilling prescriptions, or getting contact lenses or eyeglasses (if they do not negatively impact you or your family’s health), to alternating years, can help you to more easily exceed the floor and have enough medical expenses to be able to benefit from itemizing.
And remember, you are also able to deduct medical expenses paid for dependents (i.e., your children). In addition, you may also be able to deduct medical costs for other individuals that you support, for instance, an elderly relative.
If you have any questions about the deductibility of certain medical expenses, please contact your Wegner CPAs tax professional.
