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Deducting Medical and Dental Expenses

2/27/2014

 
If you plan to claim a deduction for your medical expenses, there are some new rules this year that may affect your tax return. Here are eight things you should know about the medical and dental expense deduction:

1.  AGI threshold increase  Starting in 2013, the amount of allowable medical expenses you must exceed before you can claim a deduction is 10 percent of your adjusted gross income.  The threshold was 7.5 percent of AGI in prior years.

2.  Temporary exception for age 65  The AGI threshold is still 7.5 percent of your AGI if you or your spouse is age 65 or older.  This exception will apply through Dec. 31, 2016.

3.  You must itemize  You can only claim your medical and dental expenses if you itemize deductions on your federal tax return.  You can’t claim these expenses if you take the standard deduction.

4.  Paid in 2013  You can include only the expenses you paid in 2013.  If you paid by check, the day you mailed or delivered the check is usually considered the date of payment.

5.  Costs to include  You can include most medical or dental costs that you paid for yourself, your spouse and your dependents.  Some exceptions and special rules apply.  Any costs reimbursed by insurance or other sources don’t qualify for a deduction.

6.  Expenses that qualify  You can include the costs of diagnosing, treating, easing or preventing disease.  The cost of insurance premiums that you pay for policies that cover medical care qualifies, as does the cost of some long-term care insurance.  The cost of prescription drugs and insulin also qualify.  For more examples of costs you can deduct, see IRS Publication 502, Medical and Dental Expenses.

7.  Travel costs count  You may be able to claim the cost of travel for medical care.  This includes costs such as public transportation, ambulance service, tolls and parking fees.  If you use your car, you can deduct either the actual costs or the standard mileage rate for medical travel.  The rate is 24 cents per mile for 2013.

8.  No double benefit  You can’t claim a tax deduction for medical and dental expenses you paid with funds from your Health Savings Accounts or Flexible Spending Arrangements.  Amounts paid with funds from those plans are usually tax-free.

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  • Home
  • About
    • Book An Appointment
  • Accounting
    • Dashboard
    • Xero+Accountency
    • Xero Intro
    • AutoMagical Accounting
    • QuickBooks >
      • QuickBooks Updates
    • Store
  • Payroll
  • Taxes
    • Dashboard
    • Individuals
    • Businesses
    • Tax Stuff >
      • Individuals >
        • Income >
          • Debt Forgiveness
          • Foreign Income
          • Gambling Income
          • Unemployment
          • Other Income
        • Deductions & Credits >
          • Adoption
          • Charitable Contributions
          • Earned Income Tax Credit
          • Educational Expenses
          • Energy Tax Credits
          • Employee Business Expenses
          • Other Deductions and Credits
        • Affordable Care Act - Individuals
        • Children and Dependents
        • Death
        • Disabled Taxpayers
        • Educators
        • Health Care
        • Identify Theft
        • Marriage and Divorce
        • Military
        • Real Estate
        • Retirement Savings
        • Seniors
        • State Taxes
        • Record Keeping
        • Who Must File
        • Other Topics
      • Businesses >
        • Affordable Care Act - Businesses
        • Year-end Reporting Obligations >
          • 1099's
          • Health Insurance Premiums
          • Depreciation
          • Reimbursed Employee Business Expenses
          • Company Automobiles
        • Employment Tax Credits
        • Independent Contractors
        • Tax Credits and Deductions for Businesses
        • Other Business Topics
        • Required Business Posters
      • Amended Returns
      • IRS Notices and Problems
      • Tax Plan >
        • All About the Earned Income Tax Credit
        • 5 IRS Audit Red Flags
        • Retirement Plans for Sole Proprietors
        • Are You Claiming All of Your Tax-Deductable Business Expenses for 2015?
        • All About Past Due Tax Returns
        • Do You Need to File Form 1099s?
        • How to File an Appeal with the IRS
        • Why You Might Get a Letter from the IRS, and What to Do
        • How to File an Amended Tax Return
        • Should You Claim the Home Office Deduction?
        • How to Avoid -- And Deal with -- Identify Theft
        • Q & A: IRS Audits
        • Are You Using the Right Business Structure?
        • Starting Planning for 2015 Income Taxes Now: 5 Tips
        • What You Need to Know About Estimated Taxes
        • Contractor or Employee? How the Income Tax Obligations Differ
        • The New Form 1095-A: Reporting Health Insurance Coverage
        • Are Your Social Security Payments Taxable?
        • Do You Qualify for the Earned Income Tax Credit?
        • Are You Eligible for Health Insurance Tax Credits
        • Employee Retirement Plans - Tax Advantages and Other Benefits
        • 5 Business Tax Credits You May Be Missing
        • New Business in 2012
        • Is it a Bad Debt or a Simple Revenue Loss? Telling the Difference
        • Business Taxes Add Complexity: How Will This Affect You?
      • Tax Scams