Healthcare costs can carve a big slice out of annual income, so claiming medical expenses may be a way to get some of that money back during tax time. The most useful tip for claiming medical expenses is to be informed. Knowing what types of medical care can be deducted and who is included in deductions is the best place to start figuring healthcare deductions.
Specific rules apply to claiming medical expenses, so it is best to thoroughly review all tax documents stating what can and cannot be deducted. Most tax forms include instructions and guidelines for claiming deductions. When filing taxes online, filers may prefer some software programs that help figure deductibles by asking specific questions. Tax accountants can also offer advice about tax-deductible medical expenses.
Receipts should be saved and accurate records kept throughout the year in order to make claiming medical expenses as simple as possible. A new file should be started every January to make storing medical billing records simple. Keeping a budget online or in an accounting log provides a designated place for tracking medical costs as they accrue. It is best to maintain up-to-date accounting records so filing goes smoothly when tax time arrives.
It is important to be aware of what can be deducted when gathering and saving medical records. Dental expenses are usually grouped with medical costs for tax purposes, as are prescription eyeglasses and contact lenses, so these items can be claimed as medical expenses. Other allowable deductions generally include hearing exams, ambulance fees, and certain other transportation expenses. Self-employed individuals may also be able to deduct medical insurance premiums paid during the year.
Medical expense records should be saved for everyone who can be claimed on one's income tax filing. Depending on how taxes are filed, spouses and dependent children are usually included as tax exemptions. Taxpayers should consider keeping a medical expense file for each allowable dependent to make medical claims easier to calculate.
All medical expenses are not necessarily deductible from annual income taxes. Some of the most common costs that cannot be deducted include funeral or burial expenses, over-the-counter medications, and many cosmetic surgeries. Attempting to claim unallowable expenses can cause problems, so it is best to refrain from claiming medical expenses that cannot be deducted.
In most cases, the deduction for medical expenses must exceed a percentage of the filer’s adjusted gross income. The required figure should be figured before adding medical expenses to tax forms. If medical claims do not add up to enough for a deduction, they cannot be claimed on tax returns.