8 Things to Know about
Medical and Dental Expenses and Your Taxes!
you, your spouse or dependents had significant medical or
dental costs in 2011, you may be able to deduct those
expenses when you file your tax return. Here are eight things
the IRS wants you to know about medical and dental expenses
and other benefits.
1. You must itemize You
deduct qualifying medical and dental expenses if you itemize
on Form 1040, Schedule A.
2. Deduction is limited
You can deduct total medical care expenses that exceed 7.5
percent of your adjusted gross income for the year. You figure
this on Form 1040, Schedule A.
3. Expenses must have been
paid in 2011 You can include the medical and dental
expenses you paid during the year, regardless of when the
services were provided. Youíll need to have good receipts or
records to substantiate your expenses.
4. You canít deduct reimbursed expenses Your total
medical expenses for the year must be reduced by any
reimbursement. Normally, it makes no difference if you receive
the reimbursement or if it is paid directly to the doctor or
5. Whose expenses qualify You may include qualified
medical expenses you pay for yourself, your spouse and your
dependents. Some exceptions and special rules apply to
divorced or separated parents, taxpayers with a multiple
support agreement or those with a qualifying relative who is
not your child.
6. Types of expenses that qualify You can deduct
expenses primarily paid for the diagnosis, cure, mitigation,
treatment or prevention of disease, or treatment affecting any
structure or function of the body. For drugs, you can only
deduct prescription medication and insulin. You can also
include premiums for medical, dental and some long-term care
insurance in your expenses. Starting in 2011, you can also
include lactation supplies.
7. Transportation costs may qualify You may deduct
transportation costs primarily for and essential to medical
care that qualify as medical expenses. You can deduct the
actual fare for a taxi, bus, train, plane or ambulance as well
as tolls and parking fees. If you use your car for medical
transportation, you can deduct actual out-of-pocket expenses
such as gas and oil, or you can deduct the standard mileage
rate for medical expenses, which is 19 cents per mile from
January 1 - June 30 and 23.5 cents from July 1 - December 31,
8. Tax-favored saving for medical expenses
Distributions from Health Savings Accounts and withdrawals
from Flexible Spending Arrangements may be tax free if used to
pay qualified medical expenses including prescription
medication and insulin. (Taken from IRS Tax Tip
2012-30, February 14, 2011)
If all this sounds complicated it's because it is. We
can simplify the process when you organize and bring in all
your paperwork and taxes to our office for this tax season.
Remember just because there are 2 extra days in this tax
season doesn't mean you should procrastinate. Start NOW
and give us a call to set up an appointment or ask a TAX
As always you can call our offices if you have any
questions about these or any other accounting related issues, at 360-659-8502.
Regards, David Rumsey, CPA