6 Medical Expenses You Didn't Know Were Deductible
With the cost of US healthcare sharply rising, you may wonder if you can deduct medical expenses to save money on your taxes this year. The short answer is yes. The IRS allows taxpayers to deduct qualified medical and dental expenses exceeding 7.5% of a taxpayer’s annual adjusted gross income (AGI).
While you may be familiar with some common qualified medical expenses like doctor’s visits, diagnostic tests, and hospital visits, there are many other deductions you should know. The following list outlines six lesser-known medical expenses you can deduct from your taxes this year.
Deductible Medical Expenses
1. Alternative Medical Expenses
Alternative medical practices are quickly becoming a helpful source of medical intervention. From naturopathic doctor visits, chiropractic care, and acupuncture appointments to Christian Science practices, there is a robust list of deductible alternative medical expenses.
Although this is a great tax-saving opportunity, be careful about writing off non-prescription supplements or treatments. These are non-eligible expenses that are expressly forbidden to be deducted from your tax bill. Read this IRS guide for a full list of eligible and non-eligible alternative medical expenses.
2. Infant Care Expenses
It’s no secret that preparing for a baby’s arrival is costly. Luckily, there are several infant-related care expenses you can deduct to save money for other childcare expenses in the future. If you or your spouse has decided to breastfeed, any breast pumps or other lactation aides are deductible medical expenses. This includes the pump, accessories, nursing pads, topical creams and ointments, and breastmilk storage bags.
Alternatively, if your doctor has prescribed prescription-grade infant formula for your baby, you can also deduct those expenses from your taxes. While over-the-counter baby formula is not considered tax-deductible, it may be worth speaking to your provider about prescription formulas that may fit your baby’s needs while reducing your overall tax bill.
3. Disability Accommodations & Home Improvements
As we noted in a recent article about home improvement write-offs, some home improvements to accommodate disabilities or chronic illness are deductible medical expenses. If you, your spouse, or your dependent(s) require permanent home improvements to provide daily medical-related care, you can likely deduct such expenses from your tax bill.
The following are some examples of deductible medical-related improvements you should know:
- Installing entrance and exit ramps for wheelchair accessibility or ease of mobility
- Costs of widening hallways and interior and exterior doorways
- Adding support bars and railings to extra stability and safety around your home and property
- Modifying kitchen counters and cabinets
Read this helpful IRS publication here, for a full list of medical-related home accommodations and improvements.
4. Medical Conferences
It’s often said that you are your best advocate when it comes to your health and well-being. It’s natural for people to invest in learning about their medical conditions to better advocate for themselves in the doctor’s office. Fortunately, certain informational-related costs are tax deductible.
You can deduct several fees if you register for a medical conference that is directly related to a medical condition or chronic illness of you, your spouse, or your dependent(s). For example, registration fees and transportation costs are considered tax-deductible expenses. However, lodging and any meals for you and/or your family are not considered eligible medical deductions.
5. Smoking Cessation Programs
If you’re looking for other reasons to quit smoking, consider the tax-saving opportunities! If you decide to stop smoking through the help of a smoking cessation program, you can deduct any program costs and doctor-prescribed treatments from your tax filing this year.
Having said this, pay careful attention to expenses that are not eligible for deductions. For example, non-prescribed treatments like the popular nicotine patches or chewables are not eligible for deductions.
6. Reproductive Health Treatments
Reproductive health treatment expenses are eligible medical deductions that you may not have known to claim on your tax return. Any costs associated with birth control pills or procedures, including vasectomies, are deductible medical expenses.
Similarly, pregnancy-related costs and treatments, including pregnancy test kits, IVF treatment, other fertility treatments, lab fees associated with these treatments, and storage of eggs or sperm are tax deductible. Additionally, any legal abortion-related costs are also tax deductible.
How To Claim Medical Expense Deductions
Deducting medical expenses is not a difficult process, but it does involve careful planning. If you decide to deduct these or other medical and/or dental costs, you must ensure those costs exceed 7.5% of your AGI.
You can determine your adjusted gross income by adding your wages, capital gains, business income, retirement distributions, dividends, and other income and then subtracting any deductions. Common deductions for individual taxpayers include retirement contributions, health saving account contributions, education expenses, business expenses, and dependent-related expenses.
You can refer to the IRS 1040 Form instructions for more information on calculating your AGI.
The second thing to remember is that you cannot file a standard deduction if you want to deduct any medical-related expenses. Instead, you must file an itemized deduction using Schedule A Form 1040 or 1040-SR.
Additionally, if you’re self-employed, you may be eligible for the self-employed health insurance deduction for payments on insurance policies for you, your spouse, and any dependents.
To confirm whether your medical expenses are eligible for a deduction, reach out to us today. We will help you determine eligibility and ensure you file your deductions correctly.