Medical expenses can trim taxes. Keeping good records and knowing what to
deduct make all the difference. Here are some tips to help taxpayers know what
qualifies as medical and dental expenses:
- Itemize. Taxpayers can only
claim medical expenses that they paid for in 2016 if they itemize
deductions on a federal tax return.
- Qualifying Expenses. Taxpayers can include
most medical and dental costs that they paid for themselves, their spouses
and their dependents including:
- The costs of
diagnosing, treating, easing or preventing disease.
- The costs paid for
prescription drugs and insulin.
- The costs paid for
insurance premiums for policies that cover medical care.
- Some long-term care
insurance costs.
Exceptions and special rules apply. Costs reimbursed by insurance or other
sources normally do not qualify for a deduction. More examples of what costs
taxpayers can and can’t deduct are in IRS Publication
502, Medical and Dental Expenses.
- Travel Costs Count. It is possible to
deduct travel costs paid for medical care. This includes costs such as
public transportation, ambulance service, tolls and parking fees. For use
of a car, deduct either the actual costs or the standard
mileage rate for medical travel. The rate is 19 cents per mile for
2016.
- No Double Benefit. Don’t claim a tax
deduction for medical expenses paid with funds from your Health
Savings Accounts or Flexible
Spending Arrangements. Amounts paid with funds from these plans are
usually tax-free.
- Use the Tool. Taxpayers can use the
Interactive Tax Assistant tool on IRS.gov to see if they can deduct
their medical expenses.
Taxpayers should keep a copy of their tax return. Beginning in 2017,
taxpayers using a software product for the first time may need their Adjusted
Gross Income (AGI) amount from their prior-year tax return to verify their
identity. Taxpayers can learn more about how to verify their identity and
electronically sign tax returns at Validating
Your Electronically Filed Tax Return.
Additional IRS Resources:
- Schedule A (Form 1040), Itemized Deductions
- Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans
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