The IRS allows you to deduct a certain amount of medical expenses if you itemize deductions. Qualified medical deductions are expenses you paid during the tax year for yourself, your spouse, or your dependents. When you prepare your 2021 Return on eFile.com - due on April 18, 2022, though you can still e-file until October 15 October 17, 2022 - all you need to do is enter your medical and dental expenses. We will then calculate for you how much of your medical and dental expenses you are qualified to deduct so you don't have to figure it out all on your own. Show Medical Tax DeductionsFor your 2021 Return, you can deduct the amount of the total un-reimbursed allowable medical care expenses for the 2021 Tax Year that exceeds 7.5% of your Adjusted Gross Income or AGI. For example, let's say your AGI is $40,000 and your medical expenses are $5,000. As a result, you could claim $2,000 on your tax return: $40,000 AGI * 7.5% = $3,000. As a result, $2,000 exceeds your $3,000 limit of your $5,000 medical expenses. You can deduct medical expenses such medications, dental treatments, eye doctor visits, hospital fees and services. Below are details on medical expenses and medical savings account information. Limits on Medical Expense DeductionsFor 2021, the limit for deductible or unreimbursed medical and dental expenses are those that are above 7.5% of your Adjusted Gross Income or AGI. For example: AGI Med/Dental Expenses 7.5% of AGI Deduction Amount $40,000 $5,000 $3,000 $2,000 In the case above where your AGI is $40,000 and your total medical and dental expenses are $5,000, you could deduct $2,000 of your medical/dental expenses because $2,000 is the amount above 7.5% of your AGI ($3,000). For medical expenses that would have been deductible in an earlier Tax Year, you can amend a tax return. List of Qualified Medical and Dental ExpensesMedical expenses are the costs associated with the diagnosis, cure, mitigation, treatment, or prevention of any disease recognized by the medical community (this includes chiropractic practices and Christian science) as well as the costs for treatments affecting any area or function of the body. Medical costs include the expenses of equipment, supplies, and diagnostic devices needed for the purposes listed above. They also include dental expenses. Below is an alphabetical list of qualified medical deductions that might apply to you. Please note that this list is not definitive or all-inclusive:
*You may deduct expenses incurred for a weight loss program if that weight loss was conducted after the diagnosis of a specific illness by your doctor. **You may deduct transportation expenses that are incurred primarily for medical reasons, such as bus fare to and from the hospital or gas consumed on your way to a medical facility. You may also include the cost of meals if they were purchased at a hospital or similar institution where you were staying for medical care. For more information about medical and dental expenses you might be able to deduct, see IRS Publication 502, Medical and Dental Expenses. High Deductible Health Plan and Health Savings AccountAs of July 17, 2019, the IRS added the following chronic condition treatments to the list of preventive care benefits for which a HDHP - high deductible health plan - can pay. These also apply to 2021 Returns. Additionally, this stands if your health care spending hasn't surpassed the plan deductible without conflicting the rules allowing pretax contributions to Health Savings Accounts (HSA). You can enroll in this type of healthcare plan with your employer or you can purchase this healthcare plan through the marketplace. If you as an employee or self-employed taxpayer are covered by an HDHP, you may contribute to an HSA with pre-tax dollars. In order to make HSA contributions with pretax dollars, an HDHP may not provide benefits for any year until the minimum deductible for that year is satisfied. However, HDHPs are not required to have a deductible for preventive care. Diagnosed Condition Preventive Care Congestive heart failure, diabetes, coronary artery disease Angiotensin converting enzyme (ACE) inhibitors Diabetes Glucometer, Hemoglobin A1c testing, Insulin and other glucose-lowering agents, retinopathy screening Asthma Inhaled corticosteroids, peak flow meter Hypertension Blood pressure monitor Liver disease and/or bleeding disorders International normalized ratio (INR) testing Depression Selective serotonin reuptake inhibitors (SSRIs) Prevention, Medical Information Testing Genetic tests by 23andMe Taxpayers can claim up to $117.74 of the $199 cost of a health-and-ancestry kit as medical care for tax purposes. Health Insurance PremiumsGenerally, medical care premiums can be included in your calculations of medical expenses. However, there are certain medical insurance premiums that you cannot include when calculating your medical expenses for tax purposes:
If you are self-employed, you may be able to deduct 100% of the amount you pay for health insurance for yourself, your spouse, and dependents as an adjustment to income (a non-itemized deduction). See if the Affordable Care Act (Obamacare) may have affected your previous year tax return and health insurance premiums. Expenses that are Not Qualified Medical DeductionsThere are certain medical expenses that are not deductible. These expenses include:
You must subtract all reimbursements that you have received for medical or dental expenses from any source throughout the year from your calculation of total medical expenses. If the cost of medical equipment or property was deducted from your taxes in a previous year and you sell that equipment in a later year for a profit, you may have to report a capital gain on your tax return. The taxable gain is the amount of the selling price more than the adjusted basis of the equipment or property. For detailed information on medical and dental expense deductions, see IRS Publication 502, Medical and Dental Expenses (including the Health Coverage Tax Credit). Did you purchase health insurance through the Marketplace? You may qualify for the Premium Tax Credit which you can use to help make health insurance more affordable. See what other tax deductions you may qualify to claim on your tax return. TurboTax® is a registered trademark of Intuit, Inc. |