Allowable Medical Tax Deductions
The IRS makes it hard to take deductions for medical expenses, but not impossible. Knowing your allowable medical tax deductions will help.
The big problem with medical expense deductions on your income tax return is that you can only deduct expenses that exceed 7.5% of your adjusted gross income. This would mean that a person with an adjusted gross income of $50,000 would have to come up with more than $3750 of medical costs to reach the limit. It is obvious that a person's routine medical bills are not considered allowable medical tax deductions.
The logic behind this tax policy is that everyone has some medical expense even if it is only Insurance premiums. Therefore, a portion of everyone's income goes for this purpose and so there should not be a deduction. It is when the medical expenses become higher than normal that they would be considered a deduction. Of course, if you take the standard deduction the routine medical expense is factored into that. If you itemize, you can only include the excess over the 7.5% limit.
Although the 7.5% limit seems daunting at first, there are a lot of items that are often overlooked. For example, the cost of travel to and from medical treatments is an allowable medical deduction. This was 24 cents per mile in 2009, but will drop to 16.5 cents in 2010. Such things as the cost of drug abuse or alcohol treatment are deductible. Many procedures that are not necessarily covered by most insurance policies might be deductible. Do not assume because your insurance does not pay for it that the IRS considers it non-allowable.
You can claim the medical expenses of all of your dependents, of course, and this is an area where many people miss deductions. Any thing that is suggested by your doctor, such as a humidifier for your home, is deductible. Even the cost of medical seminars or conferences that relate to an illness or chronic condition of you or a dependent could be deducted. Do not get carried away with this one. The cost of lodging and meals while attending the conference would not be considered a valid medical expense.
The Internal Revenue Service does not seem to care very much about your personal appearance. Any medical procedure that is purely cosmetic in nature is not going to be an allowable medical tax deduction. So, the Rhinoplasty operation that takes that annoying bump off of your nose is not going to be deductible. Over the counter drugs are not allowable either. The 7.5% limit on medical deductions is usually not reached by people who remain very healthy during the tax year, but most people do not get overly distressed by good health. However, if you have anyway to surpass that amount, you should take advantage of it.