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Medical Debt Tax Deductions Guide

how to claim medical expenses as tax deductions

Medical debt is often one of the largest debts people face. While there’s no way to avoid paying back the debt, you may qualify for a tax deduction while dealing with your medical debt. Below is a guide to knowing if you qualify for the tax deductions and what counts as a medical expense.

Do You Qualify?
You may deduct medical costs if the amount you spent on you, your spouse, and/or your dependents exceed 10% of your adjusted gross income. (source: IRS – Topic 502: Medical and Dental Expenses)

What Counts As Medical Expenses?
Many medical-related expenses are deductible, including payments to ‘doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners.’ Other expenses that are tax deductible include costs of in-home care, reading glasses and contacts, crutches, wheelchairs, in-patient care at substance abuse centers, and transportation related to medical care, such as cab fare to a hospital. Some items are unfortunately not tax-deductible, including insurance premiums, veterinary fees, babysitting, and funeral services. The IRS made a great list of what items are and aren’t tax deductible in Publication 502.

How To Prove Medical Costs?
Record-keeping is essential to file for deductions. Save every statement and receipt from doctors and other medical services. Also, file your credit card statements and checks containing medical costs. The more records you have, the better.

Deductions For Health-Conscious and Special Needs
Weight-loss programs and stop-smoking programs may be tax deductible, if medically necessary. A letter of recommendation from your doctor for a weight-loss program is a good idea if you intend on deducting the cost of a program. For people with special needs, several items are deductible that may surprise you. Guide dogs, an extra pair of glasses, handrails installed in your house, hearing aids, wheelchairs, and nursing home care are all tax deductible items.

Remember that you do not qualify for deductions if medical expenses were under 10% of your adjusted gross income. While many items qualify towards medical costs, items such as cosmetic surgery, teeth-whitening, and weight-loss programs for non-medical reasons are not deductible. As a general rule, if it wasn’t a doctor or recommended by a doctor, it probably isn’t deductible.

More resources to help with medical tax deductions:

Maximizing Your Medical Deductions
Medical Tax Deductions: 11 Tax Saving Tips
How To Claim the Medical Expenses Tax Deduction

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Filed Under: Featured, Health, Taxes

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