Ask the Professional

Ask the Professional:

I get a lot of questions about medical expenses and if they are tax deductible.  As with all tax issues there is never a straight forward answer, there are always a lot of “If, Then” scenarios to go through to determine if you qualify for many of the tax deductions.  So I have put together some important information that you should know when considering this tax deduction.

The first thing that you must know about the medical expense deduction is you must itemize your deductions on Schedule A in order to qualify, which usually means that you have mortgage interest and real estate tax deductions.  There are other expenses reported on the Schedule A so it is best to review your prior year returns or ask your tax advisor.  Prior to 2013, you could claim medical expenses if they exceeded 7.5% of your AGI, or Adjusted Gross Income.  However, this has changed and in 2013 if you are under 65 years of age, medical expenses now have to exceed 10% of your AGI in order to qualify for the deduction.  If you are 65 or older the 7.5% threshold still applies.

Deductible medical expenses are those not paid by your insurance and may include the following:  payments of fees to doctors and dentists, hospital or nursing home care, prescription drugs, false teeth, eye glasses, hearing aids, transportation essential to medical care, and medical insurance premiums.  This is only a partial list of deductions. For more information you can visit the IRS website, www.IRS.GOV and search Tax topic 502.

As always please consult with your tax advisor to determine if you qualify to take this deduction.  If you would like more information, please call Heather Tinelli at Shore Accountants, 410-758-6900.