There are plenty of horror stories about uncovered medical expenses these days, and the truly horrifying part is that many of them belong to people who actually have health insurance. Anytime you or a family member is facing a health crisis or an unusual medical-related expense, it's best to check with a tax professional to see if you might get a break from Uncle Sam.
The Internal Revenue Service lets you deduct medical costs as long as they are more than 7.5 percent of your adjusted gross income. That means if your AGI is $50,000, you can deduct only those unreimbursed expenses that exceed $3,750.
Getting there requires some planning, which is why it's so important to gather up every dime of unreimbursed medical, dental and vision care expenses and review it carefully.
Here are things people often miss:
Insurance premiums: You may deduct the cost of long-term care insurance, up to certain limits based on your age. If you're self-employed, you may deduct, as an adjustment to gross income, the full cost paid for medical insurance for you, your spouse and your dependents.
Uninsured medical treatments: This includes what you spend for eyeglasses, contact lenses, dentures, hearing aids or artificial limbs. If a doctor prescribes it, you'll be able to deduct it. Laser vision correction surgery may be deductible also.
Doctor-recommended equipment: If your doctor tells you that you need a humidifier installed on your heating and air conditioning system to help your breathing problems, you might be able to deduct all or part of the cost for the device. If you do a home improvement that's considered medically necessary, you'll be able to deduct the cost. This may include special entrance/exit ramps, widening doorways, modifying bathrooms, or adding a chairlift. Because these improvements are not expected to add to the market value of the home, they are considered fully deductible. If the improvement increases the value of your home, only the amount of the expense that exceeds the increase in the property value of your home is deductible.
Nursing services: If you are paying out-of-pocket for home care by a nurse, the expense may be deductible.
Lead paint removal: Lead paint is dangerous, and the money needed to remove the paint from a home is deductible.
Dianne Webster, CFP is a registered investment adviser with Integrated Financial Strategies LLC, 8 Star Lane, Amesbury. She offers securities through Commonwealth Financial Network, Member FINRA, SIPC. Questions to be considered for future personal finance articles may be sent via e-mail to dwebster@ifslegacy.com.
