Medical expenses are the major expenses that are spent in a year by everyone. Medical emergencies arise anytime and we need to spend on that. Most of them are not covered under your medical insurance. Every medical insurance company will have its norms and the policy may not cover all your medical bills. The Internal Revenue Service, a US agency, who is responsible for implementing tax rules and collecting taxes from US citizens, has given some relief to the US taxpayers by allowing some of the medical expenses as tax deductibles. People are not much aware that they can claim their medical expenses on their taxes. Let us understand the procedure with the step-by-step explanation as given below.
Medical Expenses – Claiming procedure in the US
- First, you need to get IRS form 1040 and then attach Schedule A along with the form and submit for a Tax deduction.
- Now in Schedule A, you need to mention the total medical expenses that you have spent during that financial year on the first line.
- Every US citizen will know what his Adjusted Gross Income (AGI). You need to enter your AGI in the second line.
- Calculate the 7.5% of your AGI and enter it on the third line.
- Find out the difference in the amount between your medical expenses and the 7.5% of your AGI and enter that difference amount on the fourth line.
- The amount entered on the fourth line should be deducted with the adjusted gross income and this final amount will be taken into consideration for a tax deduction.
Tax Deductible medical expenses in the US
When you are calculating your medical expenses to claim for the tax deduction you need to first know what are medical expenses are eligible for a tax deduction. Those eligible expenses can be taken into consideration and the rest cannot be added. Let us have a clear picture of the tax-deductible medical expenses.
Medicines and doctor fees – Expenses that are spent on medical services received from physicians, surgeons, or any other medical professionals. Medicines that are prescribed by the medical professional and the cost of the medicines.
Adaptive equipment – Expenses on purchasing medical devices or the necessary accessories like eyeglasses. In some cases, the patient may be temporarily disabled and would need a wheelchair to move. The cost of those accessories can also be deducted.
Diabetes – diabetes patients need to take blood tests periodically and they may need to take insulin as a drug. These expenses can be included.
Eye & ear treatments – the expenses spent on eye examination, contact lenses, eye surgery, and even the cost of getting a braille book is also deductible. Hearing issues and the treatment cost for rectifying the problem can be included.
House renovation – to occupy the disabled person in the house, you need to modify the house to put a bed or to have a wheelchair. You may need to extend your buildings. These expenses can be included in the deduction.
Lodging expense – when you have your treatment out of the town then you may need to stay in a hotel and should visit the hospital. For an individual adult, up to $50/ night can be deductible. If the patient is a minor and needs an adult to accommodate him then $100/night is deductible.
Reproduction treatment expenses – nowadays people spent more on reproduction treatment that includes pregnancy test kits, abortions, fertility treatments, birth control pills, and vasectomies.
Insurance premium – The premiums paid for any health insurance or dental insurance.
Alternative treatments – apart from allopathy other alternative treatments like acupuncture and its costs can be deductible.
Non-deductible medical expenses in the US
Expenses for children well-being – we may have babysitters for taking care of our children. If our child is healthy then we cannot claim the babysitting salary. Also in some cases, we may like to strengthen the mental and physical abilities of the child and might take them to dance class or even swimming class. These class fees cannot be eligible to be deducted from your tax.
Cosmetic surgeries – making yourself beautiful has nothing to do with medical expenses. You may go through cosmetic surgeries or liposuction or even tummy tucking surgeries. These surgery costs cannot be included. Even teeth whitening products are considered to be cosmetics and are not included in the deductible list.
Membership fee – people may join in health clubs to keep them healthy and in gyms to keep them physically fit. They even join in any weight loss program to reduce their weight. Although all these are advisable for good health, the membership fee for joining these clubs cannot be deducted from your tax.
Reimbursed medical expenses – when we have medical insurance, we would be reimbursed for what we have paid to treat the sickness. So if you have claimed and received the payment, those expenses cannot be claimed again for the deduction.
Non-prescribed drugs – people most of the cases will treat themselves on their own. They will take painkillers for headaches or any other ache without visiting a doctor. Even a pharmacist may give you drugs that are not prescribed by a medical professional. The expense for buying these drugs cannot be included in the deduction.
Expired period of expense – tax is calculated for every financial year. Sometimes we may forget to include certain eligible medical expenses from last year. Those bills cannot be carried forward to next year. The IRS will check for the date of every bill you produce and the expired bills will be automatically rejected for calculation.
Always have a clear idea about the tax and the deduction. Go through the relevant documents and gain enough knowledge about the procedures involved in calculating and paying the taxes to the government. Try to avail of all the benefits that your country provides you and save more money. This article would have given you a detailed explanation about the deductible and non-deductible medical expenses. Plan your expenses accordingly and be benefited.