Deducting Medical Expenses

Can I get a tax break for medical expenses?

Yes—the medical expense deduction lets you recoup some of the cost of unreimbursed expenses from doctor visits, prescriptions, and other medical expenses on your tax return.

What is an unreimbursed medical expense?

First, note that to deduct a medical expense, it has to be an unreimbursed expense. That means if you pay for an expense out-of-pocket but get reimbursed by your insurance company or anyone else, you can’t claim that expense as paid by you.

You may be able to deduct expenses like medical supplies, dental treatments, and insurance premiums. See What Medical Expenses are Deductible? Medical expenses for your spouse and qualifying dependents naturally count too.

What are the rules for deducting medical expenses?

The rules for deducting medical expenses may seem overwhelming, but they are actually pretty straightforward:

• You must claim any expenses the year you paid for them. If you paid by credit card, claim the expense in the year you charged it to your card, not in the year you paid the charge off.
• You must reduce your total medical expenses for the year by reimbursements from an insurance company or other agency, including Medicare. If the reimbursement is for services that are nondeductible, you must still claim the full amount of the reimbursement. If you pay for an expense this year and get reimbursed in a future year, the reimbursement is considered taxable income in the future year.
• If you pay any medical expenses from a Health Savings Account (HSA), Medical Savings Account (MSA), or Flexible Spending Arrangement (FSA), you can’t include these payments when figuring your deduction.
• Make sure to keep any receipts from doctors and pharmacies, bank statements, and credit card statements showing where you paid for services, supplies, and any insurance premiums paid. Keeping track of your expenses will save time and headaches when filing your taxes.

Which medical expenses can I deduct?

You can deduct any expense for the diagnosis, curing, treating, or prevention of disease affecting any part or function of the body. Deducting costs must also either alleviate or prevent a physical or mental defect or illness. Expenses geared more toward general health, like vitamins and vacations, are generally not deductible.

Is there a dollar limit on claiming a medical deduction?

Yes, you can only deduct the amount that exceeds 7.5% of your adjusted gross income (AGI) for 2020.

Whose medical expenses can I deduct?

You can deduct any medical expense for you, your spouse, and qualifying dependents. If you’re wondering who counts as a qualifying dependent, see Who Can Be Claimed as a Dependent? If you’re claiming expenses for your spouse, you must have been married at the time your spouse received service OR when you paid the expense.

Can I deduct my child’s medical expenses if I’m divorced or separated?

If you’re divorced or legally separated, the expenses paid by each parent for a dependent child can be claimed on separate returns. If you and several other people help cover medical expenses under a multiple support agreement, only the person claiming the dependent can claim the deduction.

Can I deduct medical expenses for someone who passed away?

If claiming deductions for a deceased taxpayer, the medical expenses are included on the decedent’s final return. You can also include expenses of the decedent’s spouse and dependents, if filing jointly. The expenses must be paid within the one-year period starting the day after death. You may also file an amended return for the deceased claiming the deduction on the previous year’s return.

Claiming medical expenses is simple when you file with Tax Office & Associates_™

To claim the medical expense deduction on your Tax Office & Associates_™ return, simply enter your expenses in our tax-filing walkthrough. Don’t worry about whether you have enough expenses to itemize: Just add the expenses, and if you have more itemized deductions than the standard deduction, we’ll use that for you automatically.

Making your taxes as simple as possible is what we’re all about—don’t forget to call us to get started today!

Also see Claiming a Child When Divorced