How to Get Medical Expense Tax Deductions

Deduct medical expenses on form 1040.

Medical expenses, even for those with good health insurance, can add up over the course of a year. U.S. Federal tax law allows you to deduct certain medical expenses to lower your tax bill. Learn the conditions for how to get medical expense tax deductions and how to deduct some not-so-obvious medical expenses.

Instructions

1. Calculate any medical expenses above 7.5 percent of your adjusted gross income. For example, if your adjusted gross income is $50,000, you can only deduct medical expenses if they total $3,750 or more.

2. Add up all medical expenses based on your receipts and canceled checks. Do not include health insurance premiums paid to your employer for health insurance.

3. Include all medical miles driven. These include miles driven to doctor's appointments, therapists, a pharmacy or medical conferences for any medical research studies you may be in. Multiple the number of miles by .20 to arrive at the deductable dollar amount.

4. Add the receipts and medical mile totals. Ensure that the number is greater than 7.5 percent of your gross annual income.

5. Compare whether your tax rate is lower by taking the standard exemption or by itemizing your medical expense total.

Tips & Warnings

• If you choose to itemize, you must use IRS Form 1040.

• Most tax preparation software will automatically calculate medical expenses and determine whether you reach the 7.5 percent threshold or not.

• If you cash out part or all of a 401K retirement account for medical expenses, the IRS waives the 10 percent penalty.

• Some not-so-obvious medical expense deductions may include: schools for children with special needs, home occupational therapy equipment and items purchased to accommodate disabilities. Check with your tax adviser on these issues.

• Keep careful records of all expenses and miles in the event of a future audit.

References

• IRS: Publication 502 - Medical Expenses

Resources

• Internal Revenue Service