Medical expenses on your tax return
Your deduction for medical expenditures is limited to the amount that exceeds 10.0% (7.5% if 65 or older in 2014) of your adjusted gross income. Stated another way, you cannot deduct medical expenses until they exceed 10.0% (7.5% if 65 or older in 2014) of your adjusted gross income, and then you can only deduct the excess above that amount.
You may not deduct medical expenses that are reimbursed by your insurance policy or your health savings account. If reimbursement is received in a year later than the expense was incurred you must report the reimbursement as income if you previously deducted the amount as a medical expense.
Medical expenses are defined as the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. This includes the costs of equipment, supplies, and diagnostic equipment needed for these purposes. Medical expenses do not include expenses that are incurred for general health, such as vitamins or a vacation.
You may deduct medical expenses paid for the care of you, your spouse, or your dependents. For medical expense purposes a child of divorced or separated parents is considered a dependent of both parents.
Deductible medical expenses include:
Items NOT deductible include:
- Artificial limbs
- Capital expenses for equipment or improvements to your home
- Contact lenses
- Diagnostic devices such as blood glucose monitors
- False teeth
- Fertility enhancement procedures - with limits
- Guide dogs for blind, deaf, disabled
- Hearing aids
- Hospital charges and service fees
- Long term care contracts
- Medical and hospital insurance premiums
- Medical service fees from doctors, dentists, surgeons, specialists and other medical practitioners.
- Medications prescribed by a doctor, including birth control pills
- Nursing home
- Organ donor's expenses
- Oxygen Equipment and oxygen
- Psychiatric and psychological treatment
- Stop smoking programs
- Surgical fees
- Treatment at a drug or alcohol center
- Travel and transportation expenses
- Tubal ligation
- Wages for nursing services
- Weight loss expenses for obesity - with limits
- Baby sitting and child care
- Bottled water
- Diaper service
- Expenses for your general health such as health club dues, household help, dancing or swimming lessons, and travel, Funeral, burial, or cremation expenses
- Herbal supplements
- Illegal operations or treatments
- Life insurance or income protection policies
- Medical insurance included in a car insurance policy
- Non-prescription medicines
- Nursing care for a healthy baby
- Policies providing payment for the loss of life, limb, sight, etc.
- Prescription drugs you purchased from another country
- Surgery purely for cosmetic reasons
- Teeth whitening procedures
- Toothpaste, cosmetics, toiletries
- Vitamins or nutritional supplements
- Weight loss expenses not for the treatment of obesity or other disease
You can deduct the cost of capital equipment prescribed by your doctor. Therapeutic bedding and free standing hot tubs are examples of such equipment. In addition, you may be able to deduct a portion of the cost of prescribed capital improvements to your home. Deductions have been allowed for swimming pools, elevators, and central air conditioning equipment. The deductible amount is the excess of the cost over the increase in value of your home. For example, assume your doctor prescribes a swimming pool for therapy and the cost of the pool is $25,000. However, the pool only increases the value of the home by $15,000, you have a medical deduction in the amount of $10,000.
Medical Insurance Premiums
You can deduct premiums for insurance policies that provide medical care. These include policies that pay for hospitalization, medical and surgical fees, prescription drugs, replacement of lost or damaged contact lenses, and qualified long-term care. You cannot deduct insurance premiums paid by your employer or by making pre-tax premiums you pay as a result of a salary reduction agreement with your employer. If the premiums are included in Box 1
of your W-2
, they are deductible. You cannot deduct your contributions to a medical savings account.
Travel and Transportation Expenses
Travel in your personal vehicle to obtain medical care or prescriptions during the 2014 tax
year is deductible at 23.5 cents a mile. In addition, you may deduct the cost of tolls or parking fees. Amounts you pay for other transportation may also be deductible. Bus, taxi, train, plane fares or ambulance services are deductible if the amounts paid are primarily to obtain medical care.
Transportation costs are deductible for a companion traveling with the patient. In addition, transportation expenses for regular visits to see a mentally ill dependent are deductible if recommended as a part of the treatment.
You may also deduct lodging not provided by a hospital or similar institution when you are away from home if the lodging is primarily for and essential for medical care, the medical care is provided by a doctor in a licensed hospital or medical facility, is not lavish or extravagant, and there is no significant element of personal pleasure while away from home. The limit on this deduction is $50 per person per night. Lodging for a person traveling with the patient will allow a deduction of up to $100 per night. Meals when away from home for medical reasons may also be deducted.
You can include in medical expenses the cost of medical care in a nursing home, home for the aged, or similar institution. This includes the cost for meals and lodging if the main reason for being in the facility is to obtain medical care.