Medical deductions

Uncle Sam allows special deductions when medical expenses add up.

When to itemize. If the person you care for was 65 years or older last year (2016), he or she can deduct certain medical costs. The costs must total more than 7.5% of adjusted gross income (AGI). For instance, if AGI is $40,000, medical expenses over $3,000 can be deducted. For a person younger than 65, the cost must be more than 10% of AGI. (In our example, that would mean $4,000 or more.)

Insurance premiums. Health insurance premiums are deductible. This includes money deducted from Social Security to pay for Medicare. It also includes payments made for any supplemental insurance (“Medi-gap”) and Part D (drug coverage).

Medical expenses not covered by insurance. Many things that Medicare doesn’t cover ARE deductible on taxes. These include glasses, hearing aids, and dentures. Also, doctor exams to check vision and hearing. Plus, fees for dental visits and cleanings.

Additional fees or copays. Any deductibles or co-payments for doctor visits, hospitalizations, drugs, etc. can be listed. Also lab tests, durable medical equipment, ambulance service, etc.

Complementary medicine. Medicare will not cover these services. But the IRS recognizes visits to licensed acupuncturists and chiropractors as medical expense.

Medical travel. Have your loved one keep a mileage log. Driving to appointments can be deducted at 19 cents per mile (plus parking and toll fees). Keep track of the costs of bus, taxi, or train rides. Flights and hotel expenses can be counted if your relative must travel long distance for medical care.

Home modifications. Did your relative install a ramp for easier entrance to the home? Widen doorways for wheelchair use? If the change does not increase the value of the property, then it is considered a medical expense.

Check with a professional tax preparer to verify which expenses can be deducted.