A tax deduction is a reduction of income that can be taxed by the government. The purpose of a tax deduction is to decrease an individual’s taxable income.

By decreasing the amount of an individual’s income, they can decrease the amount of income tax they owe to the federal government. There are hundreds of ways to use deductions to reduce an individual’s taxable income, but many individuals do not know about these deductions or know how to take advantage of them.

What Types of Tax Deductions are Available?

There are two main categories of tax deductions an individual can apply to their taxes each year. These are standard deductions and itemized deductions.

The standard deduction is a standard dollar amount that is set by the Internal Revenue Service (IRS) every year. Deductions that are itemized depend on the amount that is being declared in each category. Itemized deductions may include:

  • Casualty and Theft Losses;
  • Charitable Contributions;
  • Medical and Dental Expenses;
  • Union dues;
  • Home office expenses;
  • Gambling losses;
  • Interest paid on investments;
  • Property tax;
  • Personal property tax; and
  • Job-related expenses.

Are all Medical and Dental Expenses Deductible?

No, not all medical and dental expenses are deductible, as will be further discussed below. However, most medical and dental expenses that are paid for the following related to a disease are deductible:

  • Diagnosis;
  • Cure;
  • Relief;
  • Treatment; or
  • Prevention.

In addition, treatments that affect any part or function of the body are tax deductible. A specific reason is required for the expenses to be deductible, such as the alleviation or prevention of a physical or mental defect or illness.

Deductible expenses include:

  • Birth control pills;
  • Hospital service fees; and
  • Medical service fees.

Non-deductible expenses include:

  • Cosmetic surgery;
  • Health club dues, and
  • Diaper services.

Can I Claim My Medical Expenses as a Tax Deduction?

Yes, an individual may be able to claim some medical expenses as tax deductions. The law permits taxpayers to deduct certain medical expenses from their adjusted gross income. However, it is important to note that the total cost of the medical expenses must exceed a certain percentage of the individual’s adjusted gross income before they can deduct them.

An individual may also deduct medical expenses that were paid for their spouse or their dependents, such as children, parents, or siblings. However, this can be done only at the time the services were rendered or the expenses were paid.

The Internal Revenue Service allows an individual to deduct qualified medical expenses that exceed 7.5% of the individual’s adjusted gross income for the years 2017 and 2018. Starting in 2019, all taxpayers are only permitted to deduct the amount of the total unreimbursed allowable medical care expenses for the year when those expenses exceed 10% of the individual’s adjusted gross income.

For more information that may be applicable to these issues, read the following LegalMatch articles:

What Medical Expenses Are Tax Deductible?

Under the current tax laws, the medical expenses that are deductible include amounts that are paid for the following:

  • The diagnosis, cure, treatment, mitigation, or prevention of disease;
  • Treatments for the purpose of affecting any structure or function of the body;
  • Transportation and lodging costs that are incurred on trips primarily for and essential to medical care, but not including meal costs;
  • Qualified long-term care services; and
  • Medical Insurance, which includes the amount for Medicare paid as a part of an individual’s Social Security tax.

Costs for lodging include costs that are paid for someone other than the taxpayer who must accompany the taxpayer when they are seeking medical care, such as a relative or a private nurse. This deduction is limited, however, to $50 per person per night.

What Medical Expenses Are Not Tax Deductible?

There are certain medical expenses that are not tax deductible. Any medical expense for which an individual’s employer or insurance reimburses them cannot be claimed as a deduction on their taxes.

The following medical expenses are not tax-deductible:

  • Cosmetic surgery to improve an individual’s appearance;
  • Medicare tax on wages and tips that are paid as part of the self-employment tax or household employment taxes;
  • Nursing care for a healthy baby;
  • Drugs not approved by the FDA;
  • Funeral, burial, or cremation costs; and
  • Medical expenses on vitamins or dietary foods.

Is the Cost of Cosmetic Surgery Deductible?

The cost of cosmetic surgery which an individual undergoes voluntarily in order to improve their appearance but does not meaningfully promote the proper function of the body is generally not tax deductible. This is because it is not considered a necessary medical expense.

It is important to note, however, that the cost of a weight loss program is considered deductible if it is undertaken in order to relieve a disease or defect, such as obesity or hypertension. In addition, the cost of breast reconstruction after a mastectomy as well as vision correction by laser surgery are tax deductible medical expenses.

Smoking cessation programs that assist in alleviating the symptoms of nicotine withdrawal are typically deductible. However, nicotine patches and gums that can be purchased over the counter are not considered medical expenses.

Can I Deduct Medical Expenses for my Special Needs Child?

Yes, an individual can deduct medical expenses for a special needs child. In addition, any amounts that are paid or incurred for special schooling for psychiatric treatments for mentally or physically handicapped children are deductible.

Expenses that can be deducted from an individual’s taxes include:

  • Mileage to and from doctor visits and therapy;
  • Expenses on medically required foods for a special needs child;
  • Therapy supplies for a special needs child;
  • Travel and expenses to go to conferences regarding the special needs child’s diagnosis;
  • Special tutors needed for schooling;
  • Improvements to the structure of the individual’s home such as handicap assistant bars or elevator; and
  • In-home caregivers to provide assistance.

Is the Cost of Living in a Retirement Home Deductible?

The cost of living in a retirement home may be deductible, depending on the circumstances. If the primary reason for the individual living in a retirement home is that they have a physical condition that requires constant medical care, then the entire cost of living in a retirement home is deductible. If the individual is living in the retirement home primarily for personal or family reasons, only the costs that are attributable to the medical care that the individual receives in such a home are deductible.

For more information that may be applicable to these issues, read the following LegalMatch articles:

What about the Cost of Home Improvement for My Disability?

Yes, an individual may deduct the cost of certain home improvements made to accomodate a disability. An individual may deduct the cost of installing an elevator if they are physically handicapped.

However, the deduction is limited to the cost of the improvement which exceeds the appreciation to the home after the improvement. For example, if installing an elevator in an individual’s home will make the house work $20,000 more, then they may only deduct the cost of the installation that exceeds $20,000.

Can a Lawyer Help Me with My Tax Deductions?

It is crucial to have the assistance of an experienced tax attorney for any tax deduction issues or questions you may have. While a tax preparation computer program may be able to assist you with basic tax issues, it cannot provide the same level of service that an attorney can.

If you are unsure about any of your medical tax deductions or you need representation before the IRS, a tax attorney can help. An attorney will help you obtain the most deductions possible for your medical expenses.