8 Rules To Deduct Dental and Medical Expenses

8 Rules To Deduct Dental and Medical Expenses

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Did you know that in many cases, you may be able to deduct your medical and dental expenses on your federal tax return? However, there are certain rules that apply when itemizing your deductions to ensure that you will be reimbursed. Read on for eight rules to deduct your medical and dental expenses. 

1. You Can Deduct Expenses that Exceed 10 Percent of Your Adjusted Gross Income (AGI)This means that if you earn an AGI of $50,000 per year, you can only claim expenses that exceed $5,000. This is a departure from the earlier rule, which allowed you to claim expenses exceeding 7.5 percent of your income. That means it’s now more difficult to claim medical expenses.

2. Exception for Seniors
One exception to the threshold is if you are married and at least one spouse is over age 65, 7.5 percent of your income is the threshold until 2017. This goes for both partners, even if you file separate tax returns, so if your husband or wife is older than age 65, the lower threshold still applies.

3. Only Qualified Expenses Can Be Deducted
Your medical and dental expenses must fall into certain categories to be eligible for deduction. For a full list, consult IRS Publication 502.

4. You Must Itemize to Deduct These Expenses
If you choose to use the standard deduction rather than itemizing your deductions, you may not deduct dental and medical expenses. If you spend a lot of money on medical expenses that qualify, however, you should plan to itemize to maximize your deduction.

5. Costs Must Be Incurred By Family
For the purpose of the IRS, family refers to you, your spouse, and qualifying dependents. Any eligible medical and dental expenses for those people may be deducted. In some cases, however, you may be able to deduct expenses you paid on behalf of a parent.

6. Don’t Overlook Certain Expenses
For example, you can also deduct travel to and from medical appointments at the government mileage rate, as well as insurance payments that are taken out of your income after taxes. Medically necessary diet and weight loss programs may also be eligible. 

7. No Duplicate Costs
This means that if you pay for a medical expense out of a health savings account or flexible spending account that is not taxed, you may not also deduct these expenses.

8. Know What You Can’t Deduct
Non-prescription medications, such as over-the-counter drugs you purchase to alleviate cold or headache symptoms, can not usually be deducted unless specifically prescribed by a doctor. Cosmetic expenses are also not eligible, nor are veterinary expenses.

While the 10 percent AGI threshold means that it is difficult for many Americans to qualify to deduct medical and dental expenses, following these rules may mean that you see significant savings at tax time

Information provided by Parkland Mall Dental Centre, a Red Deer dentist.

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