The Guidelines for Writing Off Medical Expenses on Your Taxes

Even if you have medical insurance, you could find yourself shelling out significant sums for co-payments and services your insurance doesn’t cover. If you don’t have good insurance, you may shoulder an even bigger burden of the costs. The IRS allows you to deduct a portion of your medical expenses if you itemize deductions, but you must have significant expenses before you can take advantage of this. Consider all possible deductions in this category to determine if you have enough expenses to write off some of them.

Allowable Deductions

In addition to your out-of-pocket expenses for doctor’s visits, prescriptions and hospital stays, you can deduct the cost of dental care, eyeglasses, acupuncture treatments and physical therapy. You can deduct improvements you make to your home to accommodate a wheelchair, expenses for a therapy dog and treatment for drug or alcohol addition. Retirees who pay for Medicare Part B and D can include these costs in their deduction, and you can also include the premiums for a long-term care insurance policy. The IRS allows you deduct mileage for trips to doctor’s visits, therapy appointments and other treatments.

Deductions Not Allowed

You can’t deduct the cost of over-the-counter medications, including nicotine gum or patches that are available without a prescription. You can’t deduct health insurance premiums your employer deducts from your paycheck before taxes, money you put away in a Health Savings Account, or amounts your insurance company reimburses you for. Forget deducting the cost of cosmetic surgery, teeth whitening or hair replacement. You also can’t deduct the cost of drugs you buy in other countries or illegal drugs, even if medical marijuana is legal in your state.

Whose Expenses to Deduct

You can deduct your own medical expenses, those of your spouse and those of anyone you claim as a dependent. If, for instance, you support an elderly relative and pay his medical bills, if you’re entitled to claim that relative as a dependent on your tax returns, you can add his medical expenses to your own to figure the deduction.

Figuring Your Deduction

You may deduct only those medical expenses that add up to more than 7.5 percent of your adjusted gross income. Add up all of your expenses and subtract 7.5 percent of your AGI. The result is your deduction. If you are married filing jointly and only one of you has substantial medical expenses, filing separate returns may allow you to take advantage of medical deductions. If you do this, both of you must itemize.