Medical Expenses and Your Itemized Deductions

Thanks to the complexity of the United States tax codes, the system itself, and the variations of tax codes from state to state, completing your personal tax return and maximizing your deductions and exemptions to their fullest potential, is like trying to complete a mind-twisting maze. The average individual required to file a personal tax return has no grasp of the US tax system, and must therefore rely on one of the many tax professionals to complete their return. Quite often, deductions and exemptions are overlooked simply because of a lack of communication. The following article will discuss the medical deductions available to the individual tax payer, and the fact that qualifying for these deductions must be communicated to the tax preparer. The medical deduction allowable on your personal federal income tax return is 7.5% of your adjusted gross income. The expenses you're allowed to deduct include medical, dental and eye care expense for anyone who qualifies as a dependent for your return. If you are self-employed, the premium deductions you can take at a rate of 100%, and if it happens to be a better benefit, and if you're self-employed, take the insurance premium deduction under your Schedule C deduction. Who qualifies as your dependent, and what medical expenses incurred by that individual are deductible? Let's take a moment to clarify. A person will generally qualify as your dependent if they lived in your home for the entire year, you provided over half their support, and they meet the relationship test. And, oh yes, they must be a U.S. Citizen. What medical expenses are deductible? I think an easier question might be what is not deductible? You can't deduct expenses for which you are reimbursed, you can't deduct cosmetic surgery for which there is no valid medical reason for the procedure, and you can't deduct nonprescription medicine. That approach makes the list much smaller. What information should you provide to your tax preparer? Information such as medical expenses you paid for yourself or your children the past year, any medical insurance premiums you may have paid; dental work, eye exams, laboratory expenses, overnight expense to travel for medical treatment and hearing exams to name the most common. Now I'm going to list a few things you might not have though about. If you have trouble with your vision, and you require a Seeing Eye dog, the expense for the purchase and upkeep of the animal is a medical expense deduction. Your transportation expense to and from the doctor is deductible. Legal fees you incur in obtaining the necessary authority to treat someone for mental illness is a medical deduction. The use of artificial implants, such as teeth and limbs are deductible. Ambulance service is you're charged is a medical expense. Even having the lead paint removed from your home is a deductible medical expense, since many children are at risk for lead poisoning. There are some of the nontraditional treatment therapies available as medical deductions, acupuncture and Christian Science Practitioner fees are two of the more common, however, you should check with your service provider. Quite often, they will know if their services qualify as deductible. As you can see, there are many items that are considered medically deductible that would not readily seem to be classified as a medical expense. There as also ways to maximize the items that are normally included in medical deductions, in order to get the most bang for your buck. If you're receiving medical care that will be extended over the end of one tax year, and into the beginning of the next tax year, schedule as much of the expense during the last couple of months of the current tax year, that way you stand a better chance of including more of those dollars that are above the 7.5% mark of your adjusted gross income. If you are self-employed and must provide your family with health insurance, insure them as a part of your business; generally all members of the family will participate in a family business, therefore, you can enroll them as employees of the business and this makes the entire premium deductible.