Taxes have made it difficult for citizens to fulfill their obligations while receiving all their basic needs. If you meet your daily requirements, then your taxes will haunt you. When you pay the taxes, facilities like healthcare, education, and food become a challenge to acquire. Here to ease your burden to some extent, some medical charges are not included in your tax. This means you can enjoy medical facilities while not paying taxes on those. So what medical expenses are not tax deductible and which ones can be deducted?
Today, we will explore the relationship between tax and medical expenses. This guide will let you know which expenses you can deduct from your tax so that it can support your financial condition.
Overview of Tax Deductible Medical Expenses
Expenses that can be deducted from one’s taxable income to lower the amount of taxes due are referred to as tax-deductible expenses. Some healthcare-related expenses paid by taxpayers, their spouses, and dependents may be deductible in the context of medical expenses.
The Internal Revenue Service (IRS) has established guidelines that regulate these deductions. It ensures that you receive the proper relief for necessary medical expenses.
Examples of Tax Deductibles
Payments to Medical Practitioners: Payments made to physicians, dentists, surgeons, chiropractors, psychologists, psychiatrists, and other licensed medical professionals are deductible. This covers costs associated with diagnosis, therapy, and prophylactic care.
Prescription Medications and Insulin: Prescription drugs, such as those for insulin, are deductible medical costs. This includes prescription and over-the-counter medications issued by authorized healthcare professionals.
Medical Supplies and Equipment: Deductions are available for costs associated with medical supplies and equipment required for the diagnosis, treatment, or management of a medical condition.
Crutches, wheelchairs, hearing aids, and prosthetic devices are a few examples of such items.
Health Insurance Premiums: Premiums for health insurance coverage—whether private insurers, government-sponsored programs like Medicare, or plans acquired through employers—are deductible.
Long-term Care Services: Under certain circumstances, expenses related to long-term care services—such as assisted living facilities, home healthcare services, and nursing home care—may be deductible.
If these costs are required for medical reasons and satisfy IRS qualifying requirements for long-term care services, they are usually deductible.
What Medical Expenses Are Not Tax Deductible: A Comprehensive List
Here’s a comprehensive list of medical expenses that are typically not tax deductible:
Cosmetic Surgery
Expenses for elective procedures that are primarily cosmetic in nature, such as facelifts, liposuction, and hair transplants, are generally not tax deductible.
Non-Prescription Medications (Except Insulin)
Tax deductions are not available for over-the-counter drugs, vitamins, supplements, or herbal remedies that are not prescribed by a licensed healthcare professional.
Health Club Dues
Even if they are advised for general health, dues or membership fees to fitness centers, health clubs, gyms, or recreational facilities are not deductible medical expenses.
General Health Items
Unless prescribed by a healthcare provider to treat a specific medical condition, costs for general health items such as vitamins, herbal supplements, nutritional supplements, and health foods are usually not tax deductible.
Elective Procedures for Personal Comfort
Medical procedures or treatments performed for personal comfort or convenience rather than medical necessity, such as elective cosmetic procedures or elective procedures to improve general health, are not deductible.
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Maternity Clothes
Maternity clothing costs are not tax deductible as medical expenses, even if they are purchased for medical purposes.
Funeral Expenses
Even if they were incurred as a result of a medical condition, costs related to burial plots, funeral services, and arrangements are not deductible medical expenses.
Illegal Treatments
Tax deductions are not available for costs associated with treatments that are prohibited by federal or state law, such as illicit drugs or unapproved medical procedures.
Veterinary Fees
For tax purposes, costs associated with the medical care of pets or other animals do not qualify as medical expenses. These costs include veterinary bills, prescription drugs, and pet insurance premiums.
Non-Qualified Alternative Therapies
Costs for complementary therapies—such as acupuncture, chiropractic adjustments for overall health, or massage therapy for relaxation—that are not officially approved by the IRS as valid medical treatments are not tax deductible.
How To Deduct Medical Tax Expenses
After knowing what medical expenses are not tax deductible, you might want to learn the process of making this possible. Taxable income can be decreased by deducting medical expenses, which may result in a smaller tax liability. The following is a general guide to medical tax deductions:
Itemize Your Deductions
You must itemize your deductions on Schedule A of Form 1040 when filing your federal income tax return in order to deduct medical expenses. This is deciding not to take the standard deduction and instead listing each deduction.
If the total of your itemized deductions—including medical expenses—exceeds the standard deduction amount for your filing status, you should itemize.
Understand The Threshold
Only the portion of your medical expenses that surpasses a specific threshold of your adjusted gross income (AGI) is deductible.
For tax years 2021 and 2022, the threshold was 7.5% of AGI for the majority of taxpayers. This means that the amount of medical expenses you can write off is limited to 7.5% of your AGI. For instance, you can deduct $2,250 ($6,000 – 7.5% of $50,000) if your AGI is $50,000 and your medical expenses total $6,000.
Keep Detailed Records
Throughout the tax year, keep thorough records of every medical expense you incur. This covers all paperwork pertaining to medical care, prescription drugs, treatments, and health insurance premiums, such as invoices, statements, and receipts.
When it comes time to file your taxes, having thorough records will enable you to compute your deductible medical expenses with accuracy.
Include Eligible Expenses
Include eligible medical expenses that meet the IRS criteria for deduction. This includes payments for medical and dental services, prescription medications, medical supplies and equipment, health insurance premiums (including premiums for Medicare), long-term care services, and certain transportation and lodging expenses related to medical care.
Be Aware of Non-Deductible Expenses
Recognize that not all medical costs can be written off against taxes. Follow our above-given list and find out which services can’t be deducted.
Consider Other Tax-Advantaged Accounts
Look into other tax-advantaged accounts, like Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs), that can reduce your out-of-pocket medical expenses. Pre-tax contributions are accepted into these accounts, which can then be used to pay tax-free for qualified medical costs.
Consult a Tax Professional
See a tax expert or accountant if you’re unclear about which medical costs are deductible or how to accurately report them on your taxes. They can offer tailored advice based on your unique financial circumstances and make sure you’re taking advantage of all available deductions while adhering to tax rules and laws.
Managing Healthcare Costs
Knowing what medical expenses are not tax deductible will help you out in managing your expenses. In this complicated situation where meeting your health needs has become a task, you must take advantage of tax deductions and reduce the burden of medical bills.
So take a step today. Check out all your medical expenses and see if you can deduct any of the services from your tax payables.