Did you know that you may be able to deduct medical or dental expenses incurred in 2011 by you, your spouse, or dependent when you file your tax return? Below are eight tips you ought to have about medical and dental expenses with for IRS purposes.
These expenses must be itemized:
You may deduct qualifying medical and dental expenses if you itemize on Form 1040, Schedule A.
The deduction is limited, in that you can only deduct total medical care expenses in excess of 7.5 percent of adjusted gross income for that year. This may be done on form 1040 Schedule A.
Expenses must have been paid in 2011:
Expenses must have been incurred and paid in the year 2011. You may include medical and dental expenses paid in 2011 regardless of when the services were provided. It is imperative that you obtain and keep good receipts to back up your claims.
Reimbursements don’t count:
Your total medical expenses stated must exclude all reimbursements. This means that any reimbursements must be deducted from the expense claimed. This is because it makes no difference to be reimbursed, or if the money is paid directly to the health provider.
Qualification rules and exceptions:
Expenses you pay for yourself, spouse or dependent may be included. Special restrictions and exceptions apply to the following:
- Divorced or separated parents
- Taxpayers with a multiple support agreement
Those with a qualifying relative that is not their child
Qualifying and non-qualifying costs
Some expenses may or may not be deductible. You can deduct the following expenses;
a.) Expenses directly incurred in:
- prevention or treatment
- any treatment affecting body structure
b.) Premiums for medical, dental and some long term care insurance
c.) For drugs, however, you may only deduct prescription medication and insulin
d.) In 2011 and beyond, breast feeding supplies may also be included.
In addition, you may also deduct expenses incurred essentially and primarily for medical care. For example, the actual fare (taxi, bus, train, plane or ambulance, and toll fees). In the event that private means were used for medical transportation, you may also deduct expenses such as gas and oil, or the standard mileage rate.
Tax incentives in saving for medical expenses:
Finally, also note that Distributions from Health Savings Accounts and withdrawals from Flexible Spending Arrangements may be exempted from taxation. However, this applies only if used to pay qualified medical expenses, including prescription medication and insulin.
For any information, go through Publication 502, Medical and Dental Expenses or Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans, available from the IRS website. You may also call 800-TAX-FORM (800-829-3676).