The costs for healthcare can be high, but medical expenses can trim taxes for taxpayers who itemize deductions on their federal income tax returns (see related post)
Keeping good records and knowing what to deduct is important. Taxpayers can deduct most medical and dental costs that they paid for themselves, their spouses, and their dependents in excess of 7.5% of adjusted gross income (AGI). However, if any amount is paid or reimbursed under an HSA, FSA, Archer MSA, or HRA, a taxpayer cannot also deduct the amount as a medical expense on his/her federal income tax return. (see related post)
In order to be eligible for the medical expense deduction, an individual’s expenses must be paid for medical care. Qualifying expenses include payments for medical or dental services, prescribed medicine and drugs, insulin, medical equipment and supplies, medical insurance premiums, transportation needed to get medical care, and many other medical-related expenses. (see FAQs About Medical and Dental Expenses)
Although capital expenditures for home improvements and similar items are generally not deductible, if the purpose of a capital expenditure is for the medical care of an individual or the individual’s spouse or dependents, the cost can be deductible.
Additional information and instructions for reporting can be found in IRS Publication 502 Medical and Dental Expenses and taxpayers can use the IRS Online Tool, Can I Deduct My Medical and Dental Expenses? for further clarification.
Please contact the GYF Tax Services Group at 412-338-9300 if you need assistance with your itemized expenses or other tax issues.
Related Post:
Standard vs. Itemized Deductions for Individual Taxpayers
Understanding the Tax Advantages of Employee Benefits: FSAs & HSAs
