The tax law allows individual taxpayers to deduct certain medical expenses from their adjusted gross income. However, the total cost of your medical expenses must exceed a certain percentage of your adjusted gross income before you can deduct them.
You may also deduct medical expenses that were paid for your spouse or your dependents (e.g. children, parents, siblings), but only at the time the services were rendered or expenses were paid.
The IRS allows you to deduct qualified medical expenses that surpass 7.5% of your adjusted gross income for the year 2017 and 2018. Start of 2019, all taxpayers may deduct only the amount of the total unreimbursed allowable medical care expenses for the year that surpasses 10% of their adjusted gross income.
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What Medical Expenses are Tax Deductible?
Under the current tax law, medical expenses include amounts paid for:
- The diagnosis, cure, mitigation, treatment, or prevention of disease
- The purpose of affecting any structure or function of the body
- Transportation and lodging costs incurred on trips primary for and essential to medical care (but not meal costs)
- Qualified long-term care services
- Medical Insurance, including the amount for Medicare paid as a part of your social security tax
Lodging costs include costs paid for someone other than the taxpayer who must accompany the taxpayer in seeking medical care (e.g. private nurse or relative). The lodging deduction is limited to $50 per individual per night.
What Medical Expenses are Not Tax Deductible?
There are some medical expenses that are not considered “qualified” for tax deduction purposes. Any medical expenses for which your employer or insurance reimburses you cannot be claimed as a deduction on your taxes. The following is a list of non-deductible medical expenses on your taxes:
- Cosmetic surgery to improve appearance;
- Medicare tax on wages and tips 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 that a taxpayer undergoes voluntarily to improve his/her appearance but not to meaningfully promote the proper function of the body is generally not tax deductible because it is not considered as a necessary medical expense.
However, the cost of a weight-loss program has been deemed deductible if it is undertaken to relieve a disease or a defect, such as obesity or hypertension. Furthermore, costs for breast reconstruction after a mastectomy and vision correction by laser surgery are also deductible medical expenses.
Smoking cessation programs that help alleviate the symptoms of nicotine withdrawal are usually deductible, but the nicotine gums and patches that can be purchased over the counter are not considered medical expenses.
Can I Deduct Medical Expenses for my Special Needs Child?
Yes. Additional amounts paid or incurred for special schooling or psychiatric treatments for physically or mentally handicapped children are deductible. These expenses that can be deducted from your taxes include:
- Mileage to and from doctor visits and therapy;
- Expenses on medically required foods for special needs child;
- Therapy supplies for special needs child;
- Travel and expenses to go to conferences of your special needs child’s diagnosis;
- Special tutors needed for schooling;
- Improvements to the structure of your home such as handicap assistant bars or elevator; and
- In-home caregivers to help.
Is the Cost of Living in a Retirement Home Deductible?
Maybe. If the primary reason for living in the retirement home is that you have a physical condition that requires constant medical care, then the entire cost of living in such home is deductible.
If living in the retirement/nursing home is primary for personal or family reasons and then only the costs attributable to medical care that you receive in such home are deductible.
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What about the Cost of Home Improvement for My Disability?
Yes, you may deduct the cost of installing an elevator if you are physically handicapped. However, the deduction is limited to cost of the improvement that exceeds the appreciation to your home after the improvement.
For example, if installing the elevator in your house will make your house worth $50,000 more, then you can only deduct the cost of the installation that exceeds $50,000.
Can a Lawyer Help Me with My Tax Deductions?
While a tax-preparation computer program may help you with basic tax problems, it cannot provide the same level of service that a knowledgeable tax attorney can. If you are unsure about the characterization of your expenses or you need someone to represent you before the IRS, a tax attorney can help you.