Medical bills can get expensive. When you have to worry about a big surgery or another issue creeping up on you, your medical bills can soon get a bit scary. Most people are constantly worrying about whether their insurance will be able to help them out with these big bills or how they are going to be able to pay them all off without ruining their credit. While it is important to be good about your health and plan for the future, sometimes those bills get out of hand and you are at a loss for what to do.
Luckily, there are a few tax deductions that you can qualify for that will help you to lower those medical bills and help you get back on the right track. While there are some rules in place for how you can do this, it is a great way to save some money and help get yourself out of a big hole if you do it right. If you are dealing with medical bills and aren’t sure how you are going to deal with that tax bill as well, make sure to contact a tax professional in your area to get started.
Medical Supplies
There are some medical supplies that you will be able to deduct when you are working on your taxes. If you need to purchase batteries for your hearing aids or some supplies for a breast pump after having a baby, these can be deducted as long as you have the right receipts or proof of purchase. In some cases, modifications to your home, such as adding a ramp for someone who is handicapped or changing out the siding in order to help someone who is suffering from health issues due to mold can also be claimed under this kind of deduction.
Keep in mind that when you are making claims on this deduction, you are only able to claim the amount that insurance is not paying for. You can’t double dip and take the claims from the tax return and still get money back from your insurance. Only claim the things that you paid for out of pocket to avoid issues.
If you are unsure about whether a certain medical supply is tax deductible under this category or you need help with some other aspects of your tax return, make sure to find a tax professional in your area.
Medical Bill Amount
When most people hear about the medical expense deduction, they assume that this is the answer to all of their issues. They believe that they can get all of their medical bills paid off and never have to worry about another one again. While this would be nice, it is not exactly how the medical deduction is meant to work.
In most cases, you are only going to be able to deduct the medical bills when they fall above a certain percentage of your income. Even in this situation, you can only deduct the amount that is above that percentage. The IRS allows you to deduct any medical expense amount that is above 10 percent of your income. So if your total out your income and your medical bills and the medical bills take up 12 percent of your income, you can use this deduction. But, instead of being able to claim the full amount, you will only be able to claim that extra 2 percent.
While this may not be as big of a relief as you had hoped for, it is still going to help out a lot with your medical bills. Make sure to bring in all of the information about your medical bills as well as your income to your tax professional so you can ensure that you are getting the most possible out of this deduction at the end of the year.
What You Can’t Deduct
While the medical deductions are meant to help you out with the costs of good healthcare, they don’t cover everything and trying to get all of these deductions could get you in trouble. The first thing to keep in mind is that you can’t deduct the deductible or premiums on your health insurance. Whether you pay a little bit or a lot during each month, this amount can’t be used on your tax return and you have to still pay it out of pocket.
In addition, you are not allowed to claim anything that your insurance is already paying for. Yes, you may have a large medical bill for a surgery, but if your insurance is already paying for most of it, or even all of it, you are not able to claim all of it. You can only claim the amount that is not paid by the insurance. If another party is responsible for the payments, such as when workmen’s compensation comes into play, you will not be able to deduct this amount either.
Medical expenses are something that no one wants to deal with. They want to stay healthy and active for all of their life and never see a doctor again if possible. But when the medical bills do start coming in and you need some help to pay them off, make sure to contact a tax professional in your area who can show you all the right deductions for your needs and to ensure you are getting all the relief that you need.
Kenneth M Perkins CPA/PFS