It’s tax season, and we want to make sure our clients do not forget about the medical expense income tax deduction. If you had significant medical expenses in 2018, ask your tax preparer if you qualify!
Income and Expense Requirements
For 2018, taxpayers may deduct medical expenses that exceed 7.5% of their Adjusted Gross Income (AGI). If a taxpayer has an AGI of $50,000, she could deduct expenses that exceeded $3,750 (which is 7.5% of $50,000). So, if she had qualifying medical expenses of $5,000, she would be entitled to a $1,250 deduction ($5,000 – $3,750).
What type of Expenses Qualify?
Please see IRS publication 502 for a more detailed explanation, and a list of expenses that do and do not qualify. Qualifying expenses common among our clients include:
- Home improvements that are medically necessary
- Dental treatment
- Adult day care
- Hearing aids
- Hospital expenses
- Prescription drugs
- Health insurance premiums (including Medicare supplements)
- Lifetime care or “founder’s fees” paid to long-term care facilities
- Nursing home care costs
- Long-term care insurance premiums (amounts limited by age)
- Home nursing care
- TDD devices for the hard-of-hearing
This list is not complete, and some of these deductions are subject to limitations. Please be sure to share all of your medical expenses with your tax preparer and ask whether you qualify for this important deduction. Also, please note that the income threshold for the medical expense deduction will increase to 10% of AGI in 2019.