Medical and dental treatments can get expensive very quickly. Even if you have insurance, a serious illness, emergency, or accident can lead to major costs, especially if you end up needing long-term care or ongoing treatment.
In order to help offset the impact of extensive medical costs, the IRS does allow taxpayers to deduct medical expenses on their taxes. Read on to find out more!
Medical Expenses as Itemized Deductions
If your overall deductions for a given tax year are greater than the standard deduction, you can choose to itemize your deductions. Eligible medical expenses fall under this category.
If you know you have major costs associated with medical and dental treatments, keep track of those records throughout the year. That will help you to determine if it’s more beneficial to take the standard deduction or to itemize your deductions. If you are itemizing your deductions, you should also make sure you know what other kinds of expenses you can deduct, as well.
Eligible Medical Expenses
The IRS considers eligible medical expenses to include both medical and dental treatments. According to the IRS:
“Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.”
Eligible medical expenses must be obtained and provided legally, and they must be in service of treating a health-related condition and not simply in pursuit of general health or wellness.
It’s important to note that deductible expenses don’t necessarily have to be treatments. Some transportation costs are deductible, as are some lodging costs if inpatient care is necessary.
How Much Can You Deduct?
The main limitation on deducting medical expenses is that you can only deduct expenses that exceed 7.5% of your adjusted gross income. That means that if you make $40,000 a year, you have to pay $3,000 in medical expenses before you can start deducting medical costs.
If you need help itemizing your medical expenses and other deductions, call the pros at Taxation Solutions, Inc. today! We’re here to help Virginia Beach taxpayers like you understand the itemization process and maximize your deductions for medical expenses and more. Call today!