If you itemize your expenses on your tax return, you may be able to deduct dental and medical expenses. However, you’re only able to claim the portion that exceeds 7.5% of your adjusted gross income (AGI). Here’s an example to make it clear.
Your AGI is the income listed on line 37 of IRS Form 1040. It is all your income less adjustments such as IRA contributions, student loan interest, etc. If your AGI is $100,000, 7.5% is $7,500. If you had $10,000 in medical and dental expenses, you would only be able to deduct $2,500 (the difference between $10,000 and $7,500.) Starting January 1, 2019, however, the percentage of AGI will go up to 10%. So in this example, you would not be able to deduct any expenses at all.
Allowable deductions are those expenses in excess of any reimbursements from your health insurance plan. You may not include expenses drawn from a Health Savings Account or Flexible Spending Arrangement, since these are generally tax-free dollars.
Qualifying expenses need to be paid within the calendar year. If you paid by check, the date you mailed the check can be considered the payment date.
List of Qualifying Expenses
According to IRS.gov, qualifying expenses include “payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body.”
- Some deductible expenses are well known, others may be surprising
- Fees to doctors, dentists, chiropractors, psychiatrists, non-traditional medical practitioners
- In-patient care and expenses
- Nursing home care, if the reason for nursing home care is the availability of medical care (If that isn’t the primary reason, then only the medical care portion is deductible.)
- Inpatient treatment at a center for alcohol and drug addiction
- Weight-loss programs if they are required for treatment of a specific disease, addiction, or medical condition
- False teeth, correction for vision or hearing, aids such as crutches, guide dogs or other service animals
- Payment for admission and travel to a medical conference regarding a chronic disease you or your dependent has, when it is necessary for care or treatments
- Transportation to medical care: fare for transportation (taxi, train, bus, ambulance) or, if using personal car, either out-of-pocket cost for gas and oil or the standard mileage rate for medical expenses, plus tolls and parking
- Payments for medical insurance premiums are deductible under certain circumstances
- Cost of medical insurance premiums for you, your spouse and your dependents, if you are self-employer
- Cost of medical insurance premiums paid for using after-tax dollars
- Cost of Medicare premiums
- Cost of premiums for long-term care insurance
Be sure to check with an experienced tax professional if you’re not sure about certain deductions, particularly some of the nuanced situations regarding nursing home care, conferences, and insurance premiums. It’s certainly worth talking to someone in order to get all of the deductions you can.