Medical Deduction Tips ~ Tax Season Is Upon Us…

Tax season is upon us and for those of us with chronic illnesses; we may or may not be able to claim medical expenses. For the fortunate people without brain fog, yearly taxes can be a major headache. It is all that much worse for those of us with medical expenses and figuring out the Schedule A form. What can you deduct how much can you deduct, etc. For the most part, most people can not claim medical deductions on their taxes. Why? Simple, if you have medical insurance most of the time you never can get over that 7.5% tax floor. Say you make $40,000 for your AGI (adjusted gross income – line 38 on your 1040) you would have to spend more than $3,000 to claim any of it. I don’t want to depress anyone and you should always keep all of your receipts. Anything can happen throughout the year, more than one family member could have a lot of medical expenses. Get a old shoe box or buy one of the plastic ones with a lid. Whenever you go to the doctor, get a prescription filled, etc. throw them in your box. This way they are all in one place. Every so often, make copies and bundle them up with the receipts (this makes less work all at once).

What is deductible (Qualified Medical Expenses)? Diabetic supplies, eye exams, eyeglasses, contact lenses, contact lens solutions, hearing aids, laser eye surgery, orthodontia, dental cleanings, dental fillings, over-the-counter (OTC) medicines (not vitamins though), prescription drugs, physical therapy, speech therapy, chiropractic expenses, specialized equipment and devices for disabled persons, transportation expenses related to medical care, weight reduction programs for physician-diagnosed obesity. Whew, for more detailed information check out Section 213(d) of the IRS Publication 502.

Now for the tips and tricks:

• Mileage – I am really bad about remembering to write down the mileage when I go to the doctor. What I do is get map directions from google or yahoo (both ways, the mileage is not always the same to and from) then print out the map and file it in you receipt box. You can do this for doctors, hospitals, pharmacies, etc.
• Hearing Aids – Most insurance companies do not cover hearing aids, therefore all expenses are 100% deductible. This includes the hearing aid, batteries, repair, etc.
• Parking – Keep your receipt if you have to pay for parking.
• Stop-Smoking Programs – You can include in medical expenses for stop smoking programs. You can not deduct OTC’s such as nicotine gum or patches.
• Get a copy of one of the tax software programs. A lot of them have programs that will keep track of all of your deductions.

As crazy as our tax system is this is just the tip of the iceberg. I really encourage you to read the IRS publication 502 or contact an accountant if your taxes are more complicated.

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