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Medical Tax Deductions

what are medical tax deductions

Are medical expenses tax-deductible? For most people, medical tax deductions are difficult to come by. Unlike some deductions, a medical expense tax deduction has to meet very strict requirements. However, as a person ages, this deduction can represent a crucial annual savings.

Because of the various rules around medical deductions, it is especially important to retain copies of all information pertaining to medical expenses. That includes medical bills, letters from your insurance company, and any other records. Let’s explore the details of medical deductions.

Are Medical Bills Tax-Deductible?

Those trying to make a medical bills tax deduction first need to calculate their adjusted gross income. This is because you only qualify for medical deductions if your medical bills are at least equal to a certain percentage of your adjusted gross income (AGI). You can calculate your AGI in a given year by using IRS Form 1040 to subtract adjustments from your total gross income. Adjustments include things like retirement account contributions, tuition costs, and student loan interest. You can look elsewhere on the site to get a complete explanation of adjustments and how to calculate AGI. You should always have your AGI figure on hand for the current and previous tax years to take full advantage of all possible tax deductions.

If your qualified medical expenses for a given year exceed 10% of your adjusted gross income, you can deduct the amount that exceeds 10%. However, it is important to remember that there are some complex details for this kind of exemption, and specifics can change on an annual basis depending on the kind of expenses you have, your age, and other factors.

What Medical Expenses Are Considered “Qualified” for Medical Tax Deductions?

A large number of different medical expenses are potentially deductible. In fact, even the amount you pay to travel to and from appointments where qualified medical procedures took place can be deductible! Remember to maintain records of your mileage and gas prices relating to medical expenses throughout the year so you can take full advantage of this.

Tax-deductible medical expenses include all of the following:

  • Preventive care, such as wellness checks, hypertension checks, and

    so on

  • Treatments and surgeries, not including cosmetic or elective procedures
  • Vision care and dentistry, including eye checkups and tooth examinations
  • Medical appliances like hearing aids, dentures, and eyeglasses

What Other Information Do I Need to Maximize Deductions?

Deduction amounts for medical expenses can change rapidly and unexpectedly. For example, there are sometimes temporary deduction rules applied for certain periods of the year, for people aged 65 or older, and so on. While no one will penalize you for not making use of these special benefits, keeping them in mind can help you save as much money as possible.

It’s also important to know that there are some categories of medical treatment that cannot contribute to the 10% figure or sustain a deduction: The largest category is cosmetic surgery. In rare cases, however, a procedure usually considered cosmetic might be deemed medically necessary by a qualified physician, in which case it may count.

You can’t secure deductions for everyday health costs, such as toothpaste, mouthwash, or the cost of a gym membership. Non-prescription smoking cessation aids and other non-prescription drugs except for insulin are likewise ineligible. Deducting your medical expenses requires an itemized deduction, so it should only be done if this exceeds your standard deduction.

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Category: Taxes

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