For parents juggling work, family and unexpected medical costs in Washington, tax season can feel like one more source of stress. The good news is that certain medical expenses may reduce your tax bill if you know how to claim them properly.
Let’s explore whether your medical expenses qualify for deductions.
How much can you deduct?
You may deduct medical expenses on your federal tax return if they are significant compared to your income. The IRS allows you to deduct part of your medical and dental expenses if the costs exceed 7.5% of your adjusted gross income (AGI). For example, if your AGI is $90,000, you can deduct only the medical costs that exceed $6,750 (7.5% of $90,000).
What types of medical costs qualify?
When you’re facing big medical bills, it helps to know which expenses might reduce your tax burden. A surprising number of out-of-pocket expenses may qualify, including:
- Fees from doctors, surgeons, dentists and other licensed providers
- Transportation costs for medical care, such as mileage, parking fees or public transit
- Prescription medications
- Medical devices and equipment, such as wheelchairs, hearing aids or crutches
- Hospital stays and nursing care
- Other long-term care services
Take note that you can claim expenses for yourself, your spouse and dependents.
What doesn’t qualify?
Not all health-related costs meet the IRS rules for deductions. It’s critical to know the difference to avoid mistakes when you file. Typical non-deductibles include the following:
- Cosmetic procedures unless medically necessary
- General wellness expenses, such as vitamins, supplements or gym memberships
- Over-the-counter medications unless prescribed
- Medical expenses paid by insurance companies or other sources
Being aware of these limits can help you avoid overestimating your potential deduction and lead to more accurate filing.
Staying on top of records
Dealing with major medical bills can feel overwhelming. It can be hard to figure out which expenses qualify, whether to itemize or take standard deduction and how to track receipts or mileage effectively. Since large medical deductions can make tax returns more complex, staying organized is essential.
Keeping receipts, statements and a mileage log in one place, whether digital or paper, can make tax time easier. Careful tracking helps ensure you claim the right deductions and avoid problems if the IRS has questions later.