Being sick or dealing with medical conditions can be stressful enough without having to worry about the financial burden. However, the Internal Revenue Service (IRS) offers numerous tax deductions for medical expenses that can help alleviate some of the costs.
In this blog post guide, we’ll explore 18 tax deductions you should be aware of to maximize your tax savings and ensure you’re not missing out on any eligible deductions.
18 Tax Deductions for Medical Expenses
1. Premiums for Health Insurance
One of the most significant medical expense deductions is the cost of premiums paid for health insurance coverage. This includes premiums for policies covering medical, dental, and qualified long-term care services for you, your spouse, and your dependents.
2. Long-Term Care Insurance Premiums
If you have a qualified long-term care insurance policy, a portion of the premiums paid can be deducted as a medical expense. The deductible amount is based on your age and is subject to certain limits.
3. Out-of-Pocket Expenses
Any out-of-pocket expenses you incur for medical care, such as deductibles, co-payments, and costs not covered by insurance, can be deducted as medical expenses. This includes expenses for doctors, dentists, hospitals, prescription medications, and other qualified medical services.
4. Mileage for Medical Travel
If you need to travel for medical care, you can deduct the costs of transportation, including mileage for use of your personal vehicle. The standard mileage rate for medical travel is set by the IRS each year.
5. Medical Equipment and Supplies
The cost of medical equipment and supplies prescribed by a healthcare professional, such as wheelchairs, crutches, oxygen equipment, and diabetic testing supplies, can be deducted as medical expenses.
6. Home Improvements for Medical Care
Certain home improvements made for medical reasons, such as installing ramps, modifying bathrooms, or adding wheelchair-accessible features, can be deducted as medical expenses. However, the improvement must be directly related to medical care and cannot increase the home’s value.
7. Nursing Home and Assisted Living Costs
If you, your spouse, or a dependent resides in a nursing home or assisted living facility primarily for medical reasons, a portion of the costs can be deducted as medical expenses.
8. Smoking Cessation Programs
The cost of programs, including prescribed drugs, aimed at helping you quit smoking can be deducted as a medical expense.
9. Weight-Loss Programs
If you have a specific disease, such as obesity, hypertension, or heart disease, the costs of a weight-loss program prescribed by a healthcare professional can be deducted as a medical expense.
10. Fertility Treatments
The costs of fertility treatments, including in vitro fertilization (IVF), can be deducted as medical expenses. This includes procedures, medications, and other related expenses.
11. Psychiatric Care
Expenses for psychiatric care, including therapy and counseling sessions with a licensed professional, can be deducted as medical expenses.
12. Addiction Treatment Programs
The costs of inpatient treatment programs for alcohol or drug addiction, as well as outpatient counseling and prescribed medications, can be deducted as medical expenses.
13. Vision Care
Expenses related to vision care, such as eye exams, prescription eyeglasses, contact lenses, and laser eye surgery, can be deducted as medical expenses.
14. Hearing Aids and Batteries
The costs of hearing aids, including batteries and repairs, can be deducted as medical expenses.
15. Service Animals
Expenses related to the purchase, training, and care of a service animal prescribed by a healthcare professional can be deducted as medical expenses.
16. Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs)
Contributions made to an HSA or FSA can be deducted from your taxable income, reducing your overall tax liability.
17. Impairment-Related Work Expenses
If you have a physical or mental disability that requires you to incur expenses to work, such as attendant care services or the cost of specialized equipment, these expenses can be deducted as medical expenses.
18. Medicare Premiums
Premiums paid for Medicare Part B (medical insurance) and Part D (prescription drug coverage) can be deducted as medical expenses.
Final Words!
It’s important to note that to claim these deductions, your total qualifying medical expenses must exceed 7.5% of your adjusted gross income (AGI) for the tax year. Additionally, you’ll need to itemize your deductions on Schedule A (Form 1040) to take advantage of these deductions.
Keeping meticulous records of all your medical expenses, including receipts, bills, and insurance statements, is crucial for substantiating your deductions in case of an IRS audit.
By understanding and taking advantage of these 18 tax deductions for medical expenses, you can potentially save a significant amount of money and reduce your overall tax burden. However, it’s always advisable to consult with a qualified tax professional to ensure you’re following the latest regulations and maximizing your deductions.
