March 21, 2017
When medical expenses start adding up, Uncle Sam allows special deductions for them.
When to itemize. If the person you care for was 65 years or older last year (in 2016), they can deduct certain medical costs. The medical costs must total more than 7.5% of adjusted gross income (AGI). For example, if the AGI is $40,000, any medical expenses over $3,000 can be deducted. For people younger than 65, the medical expenses cost must be more than 10% of the AGI. (In our example, that would mean $4,000 or more.)
Insurance premiums. Your health insurance premiums are deductible! This would include any money deducted from Social Security to pay for Medicare. This also would include payments made for supplemental insurance (“Medi-gap”) and Part D (drug coverage).
Medical expenses not covered by insurance. Many things which Medicare does not cover ARE deductible on taxes. These can include: glasses, hearing aids, dentures, and doctor exams to check vision and hearing. Also, any fees for dental visits and cleanings.
Additional fees or copays. Deductibles or co-payments for doctor visits, hospitalizations, drugs, etc. can also be listed. This also includes: lab tests, durable medical equipment, ambulance service, etc.
Complementary medicine. Medicare will not cover these services. But the IRS recognizes visits to licensed acupuncturists and chiropractors as medical expense.
Medical travel. Be sure that your loved one keeps a mileage log. Driving to medical appointments can be deducted at 19 cents per mile (plus parking and toll fees). If you take a bus, taxi, or train keep track of those costs. If your loved one must travel long distances for medical care, flights and hotel expenses can be counted.
Home modifications. Did your loved one install a ramp for easier entrance into the home? Widen any doorways for wheelchair use? If the change does not increase the value of their property, then it is considered a medical expense.
As always, check with a professional tax preparer to verify the expenses can be deducted.