Tax Deductions for Medical Expenses

Anyone who is facing a year of high medical expenses should know that medical expenses can be deducted if you file a Schedule A, for itemized deductions. It's worth itemizing if your combined deductions exceed your allowed standard deduction: $4,400 for a single individual, $7,350 for a couple filing jointly, etc.

Your combined deductions can include your state and local income taxes, mortgage interest and real estate taxes, charitable contributions (cash and property), certain casualty losses, and certain work-related expenses, PLUS any amount over 7.5% of your adjusted gross income that you spent for medical care.

Your medical care expenses include medical insurance, some Medicare costs, and miscellaneous costs of health care. These could include costs for making alterations to your home prescribed for your medical condition, removing lead from your home, enrolling in stop-smoking programs, receiving dental care, and paying any travel-related expenses to get to your medical care, including mileage. Also included is admission to medical conferences that relate to your health, such as the valuable twice-yearly programs offered by Living Beyond Breast Cancer®. Even that massage you got to relieve stress MAY be deductible. Other potentially deductible expenses include breast prostheses, specialized bras, and various salves and lotions for wound and skin care.

If deducting medical expenses wasn't practical for you this year, it may be worthwhile in the future. Tax experts recommend you consider "bunching" your medical costs. This means treating medical expenses as paid on the date you post your check or on the date you charge the expense to your credit card, NOT on the date you received the medical services.

So if you anticipate high medical bills, you should "bunch" payment for those services within one particular year, if possible. Say you have high medical expenses in the upcoming year, and by year's end you know you'll have further expenses in the next calendar year. It may be worth your while to prepay some of those upcoming costs THIS calendar year, so they add to your deductible total, helping bring it over that 7.5% ceiling. Throw in any eyeglasses you may be planning to buy, any dental work you expect to need soon, or elective surgery like reconstruction. Maybe even buy that new wig or breast prosthesis.

Or maybe next year you won't have much in the way of medical expenses. As the new year approaches, hold off paying those costs you do have, if possible. Nudge payment into a year when you may exceed that 7.5% ceiling; then, at the end of that next year, prepay the medical bills still to come.

Sound like a lot of trouble? It doesn't have to be, and it can pay off for you if you're prepared to give it a little thought, and do a little extra paperwork. Good luck! And maybe you can use the extra tax savings to treat yourself to something special

Editor's Note: All information is intended for your general knowledge only and is not a substitute for professional financial advice.