Paul Toepel
Taxpayers often overlook the medical expense deduction.
While this deduction is subject to limitations, with today’s high cost of health care, many people can surpass these limitations and get real tax savings by keeping track of their annual medical costs. As long as you itemize your deductions instead of taking the standard deduction, medical expenses that exceed 7.5 percent for tax year 2018 (10 percent for 2019) of your adjusted gross income could be deductible.
The cost of health care has skyrocketed. According to the Centers for Medicare and Medicaid, the average amounts spent by a person are well over $10,000 a year.
Here are some often-overlooked medical expenses:
- Medical Expenses in General
Medical costs can be deducted, related to the diagnosis, treatment, cure or prevention of disease or costs for treating any part of the body. Those include equipment, services and supplies, ranging from eye glasses to eye surgery, from acupuncture to prescriptions. Dental expenses also are among the costs some people ignore, including dentures and artificial teeth. Even artificial limbs, bandages, hearing aids and wigs are accepted medical expenses. And don’t forget health insurance premiums.
- Long-Term Health Care Costs
An often-missed expense is the amount paid for long-term care services and long-term care insurance. Rehabilitation, therapeutic, preventative and personal care services are among those that qualify as long-term care services, if your family member is chronically ill and if it is part of a plan set by a health care practitioner. Someone is considered chronically ill if he cannot perform at least two activities of daily living, such as eating, toileting, bathing and dressing, without substantial assistance from someone else.
- Mileage
From weekly doctor’s appointments, to out-of-town visits with a specialist, or for a procedure, the miles you log while driving to meet medical needs can be deducted.
- Home Improvements for Aging and Special Needs Adults
Investing in ramps for a wheelchair, handrails and grab bars in the bathroom, or a stepless shower can be part of the deduction, as long as it doesn’t add value to the home. The IRS says that the cost of the improvement is reduced by the increase in your property value. Other changes, such as widening doorways and hallways, lowering kitchen cabinets and installing lifts, also typically do not add value to houses.
The IRS Publication 502 details the medical deduction. It is available online at irs.gov/publications/p502.
Paul Toepel is a CPA who has lived in Las Sendas for more than 17 years. His firm, Toepel Company PC, is a full-service, Mesa-based CPA firm offering a variety of services for more than 30 years.
These services include tax preparation and representation, accounting, fraud prevention and QuickBooks setup and support. The company mission is, To provide exceptional service, knowledge and experience, all while making you and your business successful.
For more information, call (480) 833-8300. Toepel Company is located at 2500 S. Power Road, Suite 129.