Glenn Sandler, CPA, of G.I. Tax Service on Medical Expenses You Didn’t Know You Could Deduct
While filing your taxes, you can either claim the standard deduction or choose to itemize your personal deductions. If you decide to itemize, there are some medical expense deductions that can be used to reduce taxable income. For the 2018 tax year, unreimbursed healthcare expenses that exceed 7.5% of your gross income can be deducted from your taxes. Here’s what it means: if you earn $50,000 per year and your medical bills for the year exceeds $3,750, the difference is deductible.
“It may seem like you have not spent a lot on healthcare during the year, but things start to look different when you start listing your expenses,” says Glenn Sandler, CPA, the Founder of G.I. Tax Service. “A lot of medical expenses that you would not expect are tax-deductible,” he concluded.
Here are some of the medical expenses that qualify for a deduction:
Adaptive equipment and home improvement
Money spent to procure equipment used to ease disability, e.g. wheelchairs, bedside commodes, bath chairs, etc., are deductible. The cost of fixtures like ramps, handrails, and stair lifts that are installed to accommodate health concerns are also deductible. However, if an installation (e.g., a steam room) will add value to your house that exceeds the cost it took you to install it, the expense is not deductible.
Eye, ear, and teeth treatments
The cost of some medical equipment used to treat eyes, ears, and teeth conditions, e.g. glasses, contact lenses, hearing aids, and artificial teeth are tax-deductible. As is the cost of eye corrective processes like LASIK and expense incurred from buying braille books.
Lodgings and travel expenses for out-of-state treatments
Travel expense incurred from taking a cab or public transportation to a doctor’s, pharmacist’s or a therapy session is also deductible.
If you travel out of state for treatment, the cost of your lodgings is deductible to the tune of $50 per night. This amount is increased to $100 per night if a parent accompanies their child on the journey.
The cost of rehabilitation programs for drug and alcohol addictions is also tax-deductible. Same goes for smoking-cessation treatments that are prescribed by a doctor; this does not include nicotine patches, over-the-counter gums and so on.
Medical expenses that are not tax-deductible include the cost of non-prescription drugs (except insulin), vitamins, diet food not prescribed by a doctor, toothpaste, health club subscriptions, and cosmetic surgeries. Additionally, if you have been reimbursed for an expense by your employer or insurance provider, you can’t claim deductions on that expense.
Please note that this list is not exhaustive. There are many more healthcare costs that are tax-deductible, e.g., childbirth-related costs, personal attendant costs, organ transplants, service animals, special education costs and so on. To learn more about medical expenses that can be added to your personal deductions, please talk to a G.I. Tax Service expert. Furthermore, keep all the receipts of medical expenses as evidence in case of an IRS audit.