I can deduct my medical and dental expenses, right? This is common statement, or question asked of a tax attorney. The answer is, yes, you can but there are limitations. The article below has been drafted by a Denver tax lawyer at The McGuire Law Firm regarding the deduction of medical and dental expenses.
Medical expenses are an itemized deduction and would be stated on Schedule A of an individual’s 1040 individual income tax return. An individual will either itemize their deductions or take the standard deduction. An issue that many taxpayers are unaware of is that the deduction for medical expenses is limited. Yes, the limitation is based off of a taxpayer’s adjusted gross income. Below, the limitation and other issues have been outlined
– Prior to 2013, you could only deduct medical expenses in excess of 7.5% of your adjusted gross income. Now, you can only deduct medical expenses in excess of 10% of your gross income. For example, if your adjusted gross income on your 1040 individual income tax return was $100,000 you could only deduct medical expenses on the schedule A that were in excess of $10,000 (10% of $100,000). This increase in the threshold percentage is actually a good example of how taxes can be “increased” without increasing the marginal tax brackets! It is important to note that if you are older than 65, the 7.5 percentage threshold still applies and this threshold is in place until 2016.
– As stated above, you would only claim medical expenses if you itemize your deductions on Schedule A. Thus, if you do not itemized your deductions and you take the standard deduction, you cannot deduct your medical expenses.
– You must have actually paid the medical expense during the tax year. For example, to claim the deduction in 2013, you must have made payment in 2013. The date of mailing is generally considered the date of payment if you mailed a medical payment late in 2013.
– The medical costs of diagnosing, treating, preventing or easing an illness or disease can be deductible. Medical insurance premiums may be deductible as well.
– You may also be able to deduct the cost of travel for the applicable medical costs.
– If you paid for the medical expense with a health savings account, you cannot take the deduction. The Internal Revenue Service would view this as “double dipping.”
For medical costs that are deductible see Internal Revenue Service Publication 502. You may also contact a Denver tax attorney at The McGuire Law Firm to discuss your tax issues and questions. A tax attorney may be able to help you with your current tax issues and tax planning for the future.
Contact The McGuire Law Firm to speak with a Denver tax attorney and schedule your free consultation!