Are Medical Expenses Tax Deductible – Overview
According to the Internal Revenue Service (IRS), you can get a tax deduction for certain reimbursed medical and dental expenses. However, the condition is that the said expenses should be more than 7.5% of your adjusted gross income (AGI). You must itemize this when filing your income tax return to claim a tax deduction.
According to the IRS, the deduction applies solely to expenses not covered by insurance or otherwise, irrespective of whether you directly receive reimbursement or if payment is made on your behalf to the doctor, hospital, or any other medical provider.
Besides this, the IRS usually does not allow a tax deduction for cosmetic procedures, non-prescription drugs (except for insulin), general toiletries, programs and trips to improve your health, or funeral or burial expenses.
Here are some standard medical expenses that are tax deductible in the US.
Which Medical Expenses Are Tax-Deductible in The US?
According to US federal tax laws, medical expenses are defined as costs for diagnosis, cure, mitigation, treatment, or disease prevention, including treatment affecting any function or part of the body.
Under this guideline, your health insurance premium costs are covered if not deducted directly from your paycheck. This coverage includes the cost of visiting a doctor, a dentist, a hospital stay, diagnostic testing, prescription drug costs, and renting or using special medical equipment.
However, the IRS also allows a wide range of costs that may not fit the above-given categories.
Remember, you can also get tax deductions on medical expenses for your spouse and dependents, including a qualifying child and eligible relatives.
Here are the different types of medical expenses that are tax deductible in the United States:
10 Tax Deductible Medical Expense Types in the US
1 – Adaptive Treatments
The cost of bedside commodes, wheelchairs, bath chairs, and other items the disabled requires is tax deductible. This also includes special hand controls and car equipment for the disabled.
Similarly, you can also seek a tax deduction for the cost of an artificial limb (prosthetic device) or artificial teeth. Besides this, people who are hard of hearing or have a speech disability can also deduct the cost of special telephone equipment from their taxes.
2 – Alternative Treatments
You can also seek tax deductions for visits to chiropractors, non-traditional medical practitioners, including Christian Science practitioners, and for acupuncture sessions. You can also seek tax deductions on alternative treatments if your doctor prescribes them.
3 – Diabetes-Related Costs
The tax deduction is also allowed on the cost of blood-testing kits, including batteries and blood strips. This also includes the cost of insulin, despite it being classified as a non-prescription drug.
4 – Childbirth and Newborn Costs
IRS allows a significant tax deduction on the cost of breast pumps and other nursing supplies that assist in lactation. In addition, if your baby requires a prescription for baby formula, the cost over the regular baby formula is tax deductible. However, the IRS does not allow tax deductions on buying diapers or hiring babysitters.
5 – Home Improvements/Capital Expenses
If you need to renovate your home or install permanent features to make it more disabled-friendly, this cost is also tax deductible. For instance, you can seek tax deductions for constructing ramps, modifying kitchen cabinets, widening doorways, and adding support bars. However, the expense is tax deductible for the costs over any increase made to the home’s overall value.
6 – Eye and Ear Treatments
You can seek tax deduction on the cost of eye exams, contact lenses, lens cleaner and solutions, including prescription eyeglasses, assuming your insurance does not cover the cost. You can also seek a deduction on the cost of radial keratotomy and LASIK eye surgery to treat vision problems, as well as for Braille books.
If you have hearing problems, you can get a tax deduction for ear exams and hearing aids, including their batteries. Besides this, you can also seek tax deductions for the cost of programs that teach Braille or lip reading or give sign language training to correct a congenital disability.
7 – Lodging for Medical Treatment
The IRS lets you deduct the cost of lodging and meals at a hospital or healthcare institution if you need essential medical care. Besides this, you can also seek tax deduction on lodging expenses if it is mainly for essential medical care, the medical care is provided by a doctor at a licensed healthcare facility, is not extravagant and the stay is not for personal recreation, pleasure or vacation.
You can effectively reduce around USD 50 per night for each person (including lodging for a partner or companion).
8 – Organ Transplants
The expenses of medical care as a donor or a possible donor of a kidney or other organs are also tax deductible under federal law. In the same manner, you can also include expenses for a donor’s medical care with the organ donation to you, your spouse or your dependent. This will also include the costs related to the transportation of the donor to and from the hospital.
9 – Attending Medical Conferences
If you need to visit a medical conference related to your, your spouse’s, or your dependent’s chronic illness, you can get a tax deduction on the cost of admission and transportation. However, remember that meals and lodging are not deductible in these circumstances.
10 – Home Care
If you need help with ADL (activities of daily living), you can get a tax deduction on the cost of hiring a personal attendant. The deductible part is restricted to personal assistance with the daily routine. Remember, it does not include the cost of housecleaning. You can even include the caregiver’s meals and extra expenses related to maintaining your house, such as rent.
Besides the above-stated circumstances, you can also get a tax deduction on several other medical expenses, including substance use disorder treatment, reproductive health expenses, expenses of keeping a service animal, dental treatments, smoking cessation programs, children with learning disabilities, travel for treatment expenses as well as weight loss program expenses and the cost of buying wigs for cancer patients.
Consult a tax expert to find out how to seek tax deductions on your medical expenses.