What medical expenses are tax deductible?

• Fees paid to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and occupational therapists, osteopathic doctors, physical therapists, podiatrists, and psychoanalysts.
• Payments for hospital services, qualified long-term care services, nursing services, and laboratory fees including the incidental cost of meals and lodging charged by a hospital or similar institution if your principal reason for being there is to receive medical care.
• Payments for acupuncture treatments or inpatient treatment at a center for alcohol or drug addiction are also tax deductible medical expenses. You may include amounts you paid for participating in a smoking cessation program and for drugs prescribed to alleviate nicotine withdrawal.
• Premiums for long-term care insurance.
• The cost of participating in a weight loss program for a specific disease or diseases, including obesity, diagnosed by a physician. In general, you may not deduct the cost of purchasing diet food items or the cost of health club dues.
• Diagnostic tests, such as a full-body scan, pregnancy test, or blood sugar test kit.
• The supplemental part of Medicare insurance (Medicare B).
• The premiums you pay for Medicare Part D insurance.
• The cost of drugs is tax deductible only for drugs that require a prescription, except for insulin.
• Admission and transportation to a medical conference relating to the chronic disease of yourself, your spouse, or your dependent (if the costs are primarily for and essential to the medical care). However, you may not deduct the costs for meals and lodging while attending the medical conference.
• The cost of items such as prescription eyeglasses or contact lenses, false teeth, hearing aids, crutches, wheelchairs, and guide dogs for the blind or deaf.
• Transportation costs primarily for and essential to medical care that qualify as medical expenses. The actual fare for a taxi, bus, train, or ambulance can be deducted. 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. With either method you may include tolls and parking fees.

The government does not allow funeral and burial costs to be deducted from taxes. They also do not allow tax deductions for over-the-counter drugs, toiletries such as toothpaste and cosmetics. Finally, most medical expenses from cosmetic surgeries are not considered tax deductible.

Case Studies: Tax Deductible Medical Expenses

Case Study 1: Qualifying Medical Expenses

A taxpayer incurred $12,000 in medical expenses during the tax year, and their adjusted gross income (AGI) was $100,000. As the expenses exceed 7.5% of their AGI, they are eligible for a tax deduction on the amount exceeding the threshold. In this case, the deductible medical expenses would be $4,500 ($12,000 – 7.5% of $100,000).

Case Study 2: Funeral and Burial Costs

In this case study, a taxpayer faced the unfortunate event of having to cover funeral and burial expenses for a family member. The taxpayer paid a total of $10,000 to honor their loved one’s final arrangements. However, when the taxpayer seeks to file their income tax return, they realize that these expenses are not tax-deductible according to the guidelines set by the Internal Revenue Service (IRS).

The IRS allows certain deductions to help taxpayers alleviate the financial burden of specific expenses. However, funeral and burial costs do not fall under the deductible expenses category. Consequently, the taxpayer cannot claim a deduction for the $10,000 spent on these solemn arrangements. Despite the emotional and financial strain they endured, the taxpayer must bear the full cost of the funeral and burial without any tax relief.

Case Study 3: Over-the-Counter Drugs and Toiletries

In this scenario, an individual incurred expenses amounting to $500 throughout the year on various over-the-counter drugs, toothpaste, and cosmetics. While these items are essential for maintaining personal health and hygiene, they are not eligible for a tax deduction according to IRS regulations. The IRS does provide deductions for medical expenses, but only for qualified medical costs that meet specific criteria.

Unfortunately, over-the-counter drugs, toiletries, and cosmetics are not included in the list of eligible medical deductions. As a result, the individual cannot include these expenses in their medical deduction calculation when filing their tax return.

Case Study 4: Cosmetic Surgeries

A person underwent cosmetic surgery for non-medical reasons and incurred $8,000 in expenses. According to the IRS guidelines, most medical expenses from cosmetic surgeries are not considered tax deductible. Therefore, the individual cannot claim a deduction for these expenses on their tax return.