Maximizing your medical deductions
Medical costs seem to increase every year. There is a way to get Uncle Sam to foot some of the doctor bills, but you need to make sure you know and follow the rules.
The IRS lets you deduct medical costs on your tax return as long as they are more than 10 percent of your adjusted gross income. (Taxpayers who are 65 or older can still use the previous 7.5 percent threshold to claim itemized medical expenses through the 2016 tax year.) The percentage may seem unattainable at first glance, but with a little tax triage you might just meet it.
Don't overlook the medical expenses of everyone listed on your tax return. Medical and dental bills for you, your spouse and your dependents count toward the allowable deduction limit. You might be able to count some medical expenses you paid for a parent, even if Mom or Dad isn't considered your dependent for exemption purposes.
And while it's not something we want to think about, don't forget about medical bills you paid for a deceased dependent in the year they were paid, whether before or after the person passed away.
Once you're confident you know just whose costs are covered, make sure you don't miss one.
Often-overlooked medical deductions:
- Travel expenses to and from medical treatments. The IRS evaluates the standard cents-per-mile allowance each year. For 2014 taxes, the medical travel rate is 23.5 cents per mile. For 2015, it drops a bit to 23 cents per mile.
- Insurance payments from already-taxed income. This includes the cost of long-term care insurance, up to certain limits based on your age.
- Uninsured medical treatments, such as an extra pair of eyeglasses or set of contact lenses, false teeth, hearing aids and artificial limbs.
- Costs of alcohol- or drug-abuse treatments can be counted on your Schedule A.
- Laser vision corrective surgery is a tax-allowable procedure.
- Medically necessary costs prescribed by a physician. That means if your doctor told you to add a humidifier to your home's heating and air-conditioning system to relieve your chronic breathing problems, the device -- and additional electricity costs to operate it -- could be at least partially deductible.
- Some medical conference costs. You can count admission and transportation expenses to the conference if it concerns a chronic illness suffered by you, your spouse or a dependent. Meals and lodging costs while at the seminar, however, are not deductible.
Health-conscious taxpayers also have a friend in the IRS. Weight-loss programs, in some instances, now might count as a deductible medical expense, joining the stop-smoking programs the agency approved earlier.
But don't try to cheat on your calorie intake or the IRS. The diet program must be medically necessary. Acceptable situations include, for example, when a doctor recommends the regimen to reduce the health risks of obesity or hypertension.