Claiming Tax Relief on Medical Expenses

Written by genevieve van wyden
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In general, medical expenses for which you have not been reimbursed are tax deductible. These expenses have to be considered "ordinary," such as medical insurance premiums, dental treatment, laser eye surgery, eyeglasses and medications. Other allowable expenses can include psychotherapy, fertility treatments, smoking cessation expenses, crutches, long-term care, vasectomy and transplants. The list includes many other medical treatments and expenses. Some items are not tax deductible, such as maternity clothing, cosmetic surgery, controlled substances and funeral expenses. This list includes babysitting, dance lessons, electrolysis, diaper services, household help, non-prescription medications and hair transplants.

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How to Claim Deductions

Using Form 1040 and Schedule A, include your total medical expenses. You will have to show written proof, so keep all receipts from bills and medical payments. If you have any amounts that have already been reimbursed, deduct those from the total you want to claim as a deduction--these are not allowed to be claimed as taxable medical expenses. Medical expenses must exceed 7.5 per cent of your adjusted gross income. If you can, try to "concentrate" your medical expenses in alternating years, allowing you to claim a tax deduction every other year.

Dependent Parent

You can claim expenses incurred by your dependent parent; simply add their expenses to your own medical expenses as part of your itemised deductions. The IRS will only consider your parent to be your dependent if you cover half of your parent's support in any year. Even if you can't claim your parent as your dependent by IRS tax rules, if you pass the "support test" just mentioned, you can include the medical expenses you paid for your parent. You will still need to meet the 7.5 per cent of adjusted gross income in order to claim your parent's expenses. If you are fortunate to still have your grandparents living, you can claim their medical expenses in the same way as you can claim your dependent parent's. If your parents or grandparents reside in a continuing-care retirement community, and you pay for their expenses while they live there, you can qualify to write this expense off on your taxes. If your parents or grandparents have long-term-care insurance and you make the premium payments on that insurance, you can include age-based premium amounts as a part of your tax deductions.

Flexible Spending Accounts

If your employer gives you the opportunity to participate in a health-care flexible spending account (FSA), you can contribute a part of your income to this FSA. Submit proof to the IRS that you've got qualified medical expenses, and you can receive a tax-free FSA reimbursement check. What you're doing is covering your expenses with pretax dollars, allowing you to be able to forget about qualifying for medical care tax deductions under the 7.5 per cent rule. If you don't participate in your employer's health insurance plan, but instead have your own private health insurance, you can still benefit. Open a Health Savings Account; remember, you would have to buy a high-deductible health plan. Now you can now make tax-deductible contributions to your HSA.

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