Medical and Dental Expenses Deduction

Medical and Dental Expenses Deduction

What is the medical and dental expenses deduction?

This deduction allows you to deduct a percentage of your qualified medical and dental expenses.

Qualified medical and dental expenses include the cost of diagnosis or treatment to cure, improve or prevent a physical or mental illness or defect. They include costs such as:

– Payments to or payments for services to doctors or dentists
– Hospital fees
– Some insurance premiums (including Medicare)
– Prescription medications
– Medical equipment and supplies
– Personal protective equipment (PPE) – See below for more information
– Miles driven with your car for medical purposes

Note: If you are self-employed and pay health insurance premiums, you can usually deduct 100% of the cost of these premiums for yourself, your spouse, and your dependents. We’ll ask you about these premiums in the Wages & Income (“Income & Expenses” if you are using TurboTax Self-Employed) section under Business Items.

Personal protective equipment (PPE) – Amounts paid for PPE, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of Coronavirus, are qualified medical expenses.

If you pay for long-term health care insurance premiums, these may also be deductible. Enter the amount paid on the Enter Insurance Premiums screen in this section and we’ll see if you qualify.

Qualified medical expenses do not include expenses that are simply related to improving general health, including:

– Vitamins
– Non-prescription drugs
– Cosmetic surgery (some exceptions apply)

To learn more about what can and can’t be included, see IRS – Medical Expense Deductions

For a complete explanation of medical and dental expenses from the IRS, see IRS Publication 502

How do I get this deduction?

To qualify for a tax deduction, you must itemize deductions on your tax return. Itemized deductions are certain types of expenses that you have during the year such as mortgage payments, medical expenses, and charitable contributions. You have a choice about how you claim your deductions. You can either take the standard deduction set by the IRS, or you can itemize (make a list) of individual deductions.

We’ll calculate both based on the information you enter. Then we’ll compare the two and help you decide which deduction to take. (It’s generally better to take the larger of the two).

Learn more about itemizing deductions.

How do I figure out this deduction?

We’ll do the math for you as we go through your return. The basic rule is that you can deduct qualified medical expenses that add up to more than 7.5% of your adjusted gross income (AGI).

Here’s how the amount is calculated. Multiple your AGI by 7.5%. This will give you the dollar amount you must exceed to start deducting your medical expenses.

Example: Your AGI is $50,000 and you have $6,000 in medical expenses. You can’t deduct the first $3,750 (or $50,000 x 7.5%), but you can deduct anything over that if you are itemizing.

Whose medical expenses can I deduct?

You can deduct qualified medical and dental expenses you paid for yourself, your spouse or your dependent at the time the medical services were provided or when you paid the bill for the services. (See Dependent Exemption for information on who can qualify as a dependent.)

You can deduct expenses for a child whom you could have claimed as a dependent (but didn’t).

Example: If you are divorced or separated, each parent can claim medical expenses he or she paid for the child, regardless of who is claiming the child as a dependent.

You can deduct medical expenses you paid for a qualifying relative if you, along with someone else, provide more than half of that relative’s support as part of a multiple support agreement.

A multiple support agreement (Form 8332) is a written agreement used when two or more people provide more than half a person’s support, but no one person provides more than half.

Example: You and your two brothers share the cost of your mother’s support qualify. You can qualify for a multiple support agreement and deduct qualifying medical expenses you paid for your mother.

You can get Form 8332 for a multiple support agree from the IRS. Have each person who is contributing support sign the agreement and attach a copy with your tax return.

In what year do I deduct medical expenses?

Deduct the expenses in the year you paid them, regardless of when the expenses occurred. For example, if you had surgery in December of 2020, but paid the bill in February 2021, you would deduct the expenses on your 2021 return.

What about deductions for health insurance premiums I pay?

If you are self-employed and pay health insurance premiums, you may be able to deduct up to 100% of the cost of these premiums. You will need to enter your health insurance premiums under Home & Business in Business Income and Expenses. The adjustment is only allowed up to the amount of your self-employed income minus the deduction for self-employment tax. Any remaining self-employment health insurance premiums not allowed as an adjustment will automatically be transferred to Schedule A and will be subject to limitations.

If you pay premiums for Long Term Care Insurance, you may be eligible for a credit or deduction. Enter the amount paid on the Enter Insurance Premiums screen in this section and we’ll see if you qualify.

Limits of this deduction

You can’t deduct medical expenses that were paid back to you (reimbursed) by your health insurance company or other sources.

You can’t deduct medical expenses that were paid from a pre-tax medical reimbursement account such as a flexible spending account from your employer or Health Reimbursement Account (HRA).

You can’t deduct contributions you make to a medical savings account (MSA) or a health savings account (HSA). And you can’t deduct medical expenses you pay for with a tax-free distribution from either or both accounts.

What paperwork do I need?

 – Keep receipts or bills for your medical and dental expenses for your records.

Show me related IRS information

 – IRS Publication 502, Medical and Dental Expenses
 – IRS Publication 17, Chapter 21, Medical and Dental Expenses