Tax Season: Medical Expense Tax Deductions Up!

Yup, household income may be down (way down in a lot of cases), but use of the medical care expense deduction is up. In fact, in 2009 (the last year with available data), the medical care expense deduction was actually the only itemized deduction that was up over the previous year, growing 5 percent from the previous year to a total of $79.9 billion, according to Internal Revenue Service data.

This actually probably makes more sense than you think. You may deduct only the amount by which your total medical care expenses for the year exceed 7.5% of your adjusted gross income, so if incomes are down, it is actually easier to take the deduction than it is when incomes are higher. That combined with out-of-pocket medical expenses going up means that you should take a close look at your medical bills to see if you qualify:

So, sit down and take a look at this list of deductions. These medical deductions may not all apply to you, but if you’ve had some medical expenses in the last year, please don’t overlook these possible deductions. They may be able to really reduce your tax bill, and all of us can use a little help these days.

Medical expenses of everyone listed on your tax return. It’s not just your personal medical expenses that can be deducted. The medical and dental bills for you, your spouse and your dependents all count toward reaching the allowable deduction limit. In some cases, you may be able to deduct some medical expenses for your parents, even if they aren’t considered your dependents.

The costs of alcohol- or drug-abuse treatments. If you have been in substance abuse treatment, your expenses can be deducted.

Travel expenses to and from medical treatments. If you have been travelling to and from your medical treatments, the IRS allows you to deduct your travel expenses based on a cents-per-mile allowance. For 2009, you are allowed to deduct eligible medical travel at 24 cents per mile. In addition, the actual fare for a taxi, bus, train, or ambulance can be deducted.

Medical conference expenses. Medical conference expenses related to the chronic disease of yourself, your spouse, or your dependent (if the costs are primarily for and essential to the medical care) are deductible. However, you may not deduct the costs for meals and lodging while attending the medical conference.

Medically necessary costs prescribed by a physician. If there are costs associated with treatments that your doctor has prescribed for you, you may be able to deduct those expenses. For example, if your doctor tells you to buy an air purifier for your home in order to help your respiratory problems, the costs of that air purifier and the additional electricity to run it may be deductible from your tax return.

Are you going to qualify for the medical expense tax deduction this year? Tell us about it in our forum!

Related posts:

1. Tax Season Tip: Deducting Your Medical Expenses from Your Taxes
2. Tax Season Tip: Health Insurance Deductions for the Self-Employed
3. Tax Season Tips: Last Minutes Medical Tax Deduction Tips
4. Tax Season Tips: Last Minute Medical Deduction Tips
5. Tax Season Tip: Health Insurance Tax Deductions for the Self-Employed