Can Medical Co-Pays Be Deducted From Your Taxes?

Medical expenses, such as co-pays, can increase your tax refund.

In doing your taxes, you can deduct many different items. One of the most notable deductions you can take is for assorted medical expenses. You should keep very careful track of all of your medical expenses throughout the year - they could help you out when tax time rolls around each year.

Where to List Itemized Deductions

Itemized deductions are listed on a form known as Schedule A. It is a form that you would fill out if you wish to go into further detail about expenses incurred during the year. It is not required to fill out Schedule A, as you can choose to just take a standard deduction based on your filing status. However, by taking a standard deduction, you lose the opportunity to deduct any types of medical expenses you may have accrued during the year.

Types of Itemized Deductions

There are several types of expenses which would be listed on Schedule A. You can deduct property taxes paid during the year, which would include any real estate, automobile and state/local income taxes. In some cases, if you have kept all of your receipts throughout the year, you may be able to deduct the general sales taxes paid over the course of the year. If you do not have that, you can instead deduct the income taxes paid (normally through payroll withholding) over the course of the year.

In addition to real estate taxes, you can also deduct the interest paid on qualified mortgages and mortgage insurance premiums.

The last major expense type that you can deduct are any medical expenses incurred throughout the year.

Deductible Medical Expenses

Deductible medical expenses would include medical and dental insurance premiums paid by you or your household.

Eligible expenses would also include any bills paid to medical or dental providers (such as doctors, specialists and hospitals), including co-payments made to these service providers for anyone who is listed on your tax return. Any mileage driven to and from medical providers should be included, and tabulated at 14 cents per mile driven.

In addition, you should also include any co-payments made for prescriptions paid for during the year.

Lastly, you can include amounts paid for your share of Medicare Part B insurance, premiums paid under Medicare Part D, and amounts paid for qualified long-term care services.

Income Threshold For Medical Expense Deductions

Taxpayers can add up their medical expenses during the year for a tax deduction. You would add the amounts up, and deduct 7.5% of your adjusted gross income. The remaining amount is what can be deducted from your income taxes and listed on Schedule A to include in your itemized deduction total.

The amount that you will be able to deduct relies heavily on your adjusted gross income, since the allowable amount is based on a percentage of that figure. However, there is no ceiling for determining how much can be taken as a medical deduction. The only barometer to apply is that of your adjusted gross income.

References

• IRS: Schedule A
• IRS: Medical and Dental Expenses
• CNNMoney: 10 Big Deductions Many People Miss