If you, your spouse, or dependents have significant medical or dental costs in 2019, you may be able to deduct those expenses when you file your tax return this year. Here are eight things you should know about medical and dental expenses and other benefits:
1. You need to itemize. You can only claim medical expenses that you paid for in 2019, and only if you itemize on Schedule A on Form 1040. If you take the standard deduction, you can’t claim these expenses.
2. Deduction is limited. You can deduct all the qualified medical costs that you paid for during the year. However, for 2019, you can only deduct the amount that is more than 7.5 percent of your adjusted gross income.
3. Expenses must have been paid in 2019. You can include medical and dental expenses you paid during the year, regardless of when the services were provided. For example, if you use a credit card, include medical expenses you charge to your credit card in the year the charge is made, not when you actually pay the amount charged. Be sure to save your receipts and keep good 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. Costs reimbursed by insurance or other sources do not qualify for a deduction. 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 child.
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. You can only deduct prescription medication and insulin (i.e., no over-the-counter medicines). You can also include premiums for medical, dental, and certain long-term care insurance in your expenses, and you can also include lactation supplies.
7. Transportation costs may qualify. You may deduct transportation costs primarily for and essential to medical care that qualifies as a medical expense, including fares 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 20 cents per mile for 2019.
8. No double benefit. You can’t claim a tax deduction for medical and dental expenses you paid for with funds from your Health Savings Accounts (HAS) or Flexible Spending Arrangements (FSA). Amounts paid with funds from those plans are usually tax-free. This rule prevents two tax benefits for the same expense.
Please call if you need help figuring out what qualifies as a medical or dental expense.