Medical Expenses and Tax Deductions

We often get questions as to the deductibility of medical expenses by non-business taxpayers (business taxpayers have more opportunities to claim tax deductions because they can utilize a medical reimbursement plan or other tax savings methods for their employees). In order to claim a deduction on your personal tax return (Schedule A- Itemized Deductions), you must make sure that the expense relates to the cost of diagnosis, cure, treatment, mitigation or prevention of any specific disease. You are not permitted a deduction for general health benefits (even if prescribed by your physician) and expenses done solely for cosmetic reasons.

Here are some medical expenses you should consider:

(1) doctor bills (such as for a physician, chiropractor, dentist, Christian Science practitioner, and psychiatric service fees)

(2) any medical equipment/supplies (wheelchair, braces, crutches, ambulances, eyeglasses, splints, oxygen equipment, etc.)

(3) medical treatments (childbirth, injections, vasectomy, insulin, abortion, acupuncture, etc.)

(4) premiums (health insurance, blue cross, etc.)

(5) Hospital Services (room and board, emergency and operating room fees, etc.)

(6) Medicine and Drugs (prescriptions only)

(7) laboratory tests (blood, urine, X-Rays, etc.)

(8) miscellaneous (alcohol/drug treatment, birth control, travel to medical facility (your mileage is tax deductible here), organ donor costs and expenses, lifetime care payments for retirement home, dog/Braille for blind individuals, special telephones for deaf individuals, stop-smoking programs, special schools for handicapped individuals, childbirth classes, education costs for handicapped children, etc.). As long as the expense is for a legal medical procedure (do not try to deduct illegal drugs!), you should be safe in claiming it.

Please also recall that the recent Health Care bill made some changes to what can be claimed as tax deductions in future years. We will report on these changes and how to plan for them as we get closer to the implementation date for this new law.