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How to Claim Medical Expense Tax Deductions

Medical expenses can damage your budget tremendously, especially when the emergency is unexpected and your insurance does not cover it. The good news is the IRS does allow you to have some relief so some medical expenses can be partially tax deductible.

However, to take advantage of their leniency you have to know what is considered a medical expenses and how to claim the deduction.

Deduction Value for Medical ExpensesMedical expense tax deduction

The IRS allows you to deduct your qualified medical expenses that exceed 10% of your AGI.

For example, let’s say you had an AGI of $45,000 and $5,475 in qualified medical expenses. You would have to multiple $45,000 by 10% to find that only expenses exceeding $4,500 could be deducted, which means your deduction would be $975.

Until December 2016, those who are over the age of 65 can deduct qualified medical expenses that exceed 7.5% of their AGI.

Deductible Medical Expenses

  • Prevent care
  • Treatment
  • Surgeries
  • Dental and vision care
  • Psychologists and psychiatrists visits
  • Prescription medications and appliances
  • Travel expenses for medical care

Non-Deductible Medical Expenses

Any medical expenses that you are reimbursed for are considered nondeductible. Additionally, you cannot deduct cosmetic procedures, non-prescription drugs (insulin is excluded) and general health items. You also can only deduct the expenses during the tax year that they occurred.

How to Claim the Medical Expenses Deduction

To claim the medical expenses deduction, you have to itemize your deductions. Additionally, you should only claim this deduction if it is higher than the standard deduction. If you decide to itemize your deductions, you have to file Form 1040 and attach Schedule A.

  1. Report the total amount of medical expenses that you paid on line 1 of Schedule A and your AGI from line 38 on Form 1040 on line 2.
  2. Put 10% of your AGI on line 3
  3. Enter the differences on line 4
  4. The results on line 4 will be subtracted from your AGI to show your taxable income
  5. If this amount is less than your standard deduction, stick with the standard deduction.

Keep in mind, if you file with TurboTax or H&R Block they will ask you the correct questions to let you know which deductions you qualify for and guarantee you will receive the largest refund ever. You can also use their free tax refund calculator to see how much of a refund you can expect.


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