If you, your spouse or dependents had significant medical or dental costs in
2011, you may be able to deduct those expenses when you file your tax return.
Here are eight things the IRS wants you to know about medical and dental
expenses and other benefits.
1. You must itemize You deduct qualifying medical and dental
expenses if you itemize on Form 1040, Schedule A.
2. Deduction is limited You can deduct total medical care
expenses that exceed 7.5 percent of your adjusted gross income for the year.
You figure this on Form 1040, Schedule A.
3. Expenses must have been paid in 2011 You can include the
medical and dental expenses you paid during the year, regardless of when the
services were provided. You’ll need to have good receipts or records to
substantiate your expenses.
4. You can’t deduct reimbursed expenses Your total medical
expenses for the year must be reduced by any reimbursement. Normally, it makes
no difference if you receive the reimbursement or if it is paid directly to the
doctor or hospital.
5. Whose expenses qualify You may include qualified medical
expenses you pay for yourself, your spouse and your dependents. Some exceptions
and special rules apply to divorced or separated parents, taxpayers with a
multiple support agreement or those with a qualifying relative who is not your
6. Types of expenses that qualify You can deduct expenses
primarily paid for the diagnosis, cure, mitigation, treatment or prevention of
disease, or treatment affecting any structure or function of the body. For
drugs, you can only deduct prescription medication and insulin. You can also
include premiums for medical, dental and some long-term care insurance in your
expenses. Starting in 2011, you can also include lactation supplies.
7. Transportation costs may qualify You may deduct
transportation costs primarily for and essential to medical care that qualify
as medical expenses. You can deduct the actual fare for a taxi, bus, train,
plane or ambulance as well as tolls and parking fees. If you use your car for
medical transportation, you can deduct actual out-of-pocket expenses such as
gas and oil, or you can deduct the standard mileage rate for medical expenses,
which is 19 cents per mile for 2011.
8. Tax-favored saving for medical expenses Distributions from Health Savings Accounts and
withdrawals from Flexible Spending Arrangements may be tax free if used to pay
qualified medical expenses including prescription medication and insulin.
If you need any more information give us a call. We are always happy to help.