As you prepare to file your taxes, there is many deductions that might apply to your particular situation. One such area is the realm of medical expenses. While most of us know that out-of-pocket expenses not covered by our insurance are deductible, there are some more unusual medical expenses that can also qualify for deduction. However, to be sure that you can claim your specific medical expenses, it is important to work with your tax professional or accountant, such as James Wells EA MBA Tax Office in Santa Cruz, CA.
Before you start claiming deductions, here are just a few of the points to keep in mind.
In order to benefit from these deductions, remember that the IRS requires that you itemize in order to take advantage of this deduction. By taking a standard deduction, you forfeit the opportunity to claim these medical expenses. However, if you do not have enough deductions to make itemizing effective, then consider just taking the standard deduction.
You can only deduct the medical expenses that exceed 10 percent of your AGI threshold. If you spent less than 10 percent, you will not be able to take this deduction on your tax filing. However, if you or your spouse is over the age of 65, the threshold is lowered to 7.5 percent of your AGI. According to the IRS, this exception lowering the threshold will apply through the end of 2016.
One area where items can be deducted is if you and your spouse had a child and choose to breastfeed. The expenses associated with lactation supplies, including a breast pump, fall under deductible expenses. What are some of the other items that fall under this category? Bottles, storage pads and containers for storing the breast milk would all qualify. However, nursing bras and creams would not count. Essentially, what can be included is anything that would be used in the course of extracting breast milk.
This particular deduction has been made retroactive to 2010, so it might be worth revisiting your tax filings from those years and see if you can amend them to take advantage of it or talk with your tax professional about amending past filings.
Depending on the circumstances, there are additional medical expenses that can be tax deductible. However, it is important to discuss these potential expenses with your tax professional or accountant to determine if they are appropriate based on your situation.
Throughout this list, there are several different deductions that have been ruled acceptable by the courts. Yet the circumstances of the deduction will depend on how they can be tied to a specific medical condition.
For example, chronic conditions can offer multiple eligible medical expenses, with various prescriptions and regular doctor visits. If you need to make major home improvements to create handicap accessibility, such as adding a wheelchair ramp or widening a doorway, those expenses may also be considered deductible medical expenses.
Medical expenses that can be essentially written off to lower your adjusted gross income are not as prevalent as the other deductions we have discussed. Still, this might be worth exploring for those who are self-employed and paying their own medical and dental insurance premiums. Working with your tax professional can assist you in finding these unique deductions and determining if you are eligible.
Additionally, you will want to be sure to claim the expense for care in the year you paid for it, versus when the expense was actually incurred. Therefore, be sure to go through your expenses and determine which ones were paid for in 2015.
As we have seen, there are a variety of expenses that can be deducted, but they depend on your circumstances. Call or click on the link below to contact one of the tax professionals at James Wells EA MBA Tax Office in Santa Cruz, CA, to discuss what eligible medical expenses you might have incurred this year.
James Wells EA MBA Tax Office