Because of the paperwork required and the Adjusted Gross Income threshold required prior to taking a medical expense deduction, many taxpayers do not keep track of their medical expenses. This approach could be costing you money. Here are some oft overlooked items.
To take your medical expense deduction in 2012 your allowable expenses must exceed 7.5% of your Adjusted Gross Income (AGI). In 2013 and beyond, unless you are 65 or older, this amount goes up to 10% of AGI. So why bother? You might be surprised at how much this expense might be. Here are some tips:
- Don’t take the easy way out. So many think itemizing deductions is such a pain, that they forego the work of collecting valid receipts. Don’t let this happen to you. Collect the receipts and determine if you may be giving away money to Uncle Sam by not itemizing your deductions.
- Insurance Premiums. Many insurance premium payments are deductible, including long-term care insurance. Many seniors omit their Medicare Part B premiums because they are automatically deducted from their Social Security benefit check.
- Look to your face. Eye care and Dental care are allowable deductions. This includes overlooked expenses for:
- Eye care: exams, glasses, contact lenses, laser eye corrections, and insurance premiums
- Dental care: exams, fillings, fluoride treatments, crowns, dentures, orthodontics, and related premiums
- Travel expenses. Parking fees, tolls, and mileage to and from appointments also count. So keep a travel log.
- Get a prescription. While over the counter purchases are not deductible, if the doctor prescribes the medicine or service it is. So get a prescription for your acid reflux versus buying over the counter meds. Get a prescription for a weight loss program and that could be deductible as well.
- Other missed opportunities. Some other commonly overlooked items include; smoking cessation programs, alcohol and drug treatment programs, home remodeling for handicap access, and visits to other health providers (acupuncture, chiropractor, and podiatrist to name a few).
Medical care is very expensive these days, and it won’t be getting any cheaper. It does not take much to make your expenses meaningful tax deductions, but only if you keep track of them.