Can You Write Off Medical Expenses? A Complete Guide to Claiming Your Medical Expenses on Your Taxes

I. Introduction

As a taxpayer, it’s important to explore all the opportunities you have to save money on your annual tax bill. One way that many people overlook is writing off medical expenses. By understanding which medical expenses qualify and how to claim them properly, you can save money on your taxes. In this article, we’ll discuss what medical expenses can be written off, the qualifications for claiming medical expenses, common mistakes to avoid, and how the Tax Cuts and Jobs Act of 2017 affected writing off medical expenses. We’ll also offer tips and advice for itemizing your medical expenses and what to do if you missed the previous tax year’s deadline but still want to write off medical expenses.

II. Understanding what medical expenses can be written off

Before you can even begin to consider writing off medical expenses, it’s important to understand what qualifies. Deductible medical expenses are those that exceed a certain percentage of your adjusted gross income (AGI). Non-deductible expenses, on the other hand, are those that don’t meet the threshold for a tax deduction.

1. Deductible expenses

Deductible expenses include any costs associated with the prevention, treatment, or cure of a physical or mental illness. This can include medical and dental treatments, prescription drugs, and medical devices. The IRS considers the following to be deductible medical expenses:

Medical and dental treatments, including surgery and diagnostic tests
Prescription medications
Medical equipment, including crutches, wheelchairs, and hearing aids
Transportation costs to and from medical appointments
Costs associated with long-term care, including insurance premiums
Psychological and psychiatric treatments

2. Non-deductible expenses

There are certain medical expenses that aren’t eligible for a tax deduction, such as cosmetic procedures, over-the-counter medications, and elective treatments that aren’t medically necessary. Even if your health insurance policy doesn’t cover a specific treatment or procedure, that doesn’t mean you can necessarily write it off on your taxes.

III. Qualifications for claiming medical expenses

Before you can claim medical expenses as a deduction, you’ll need to meet certain qualifications. The first consideration is your income. If your AGI is too high, you may not be eligible to take a deduction. Additionally, you’ll need to meet a certain threshold of medical expenses before you can start claiming them on your taxes.

A. Income thresholds of taxpayers

The IRS sets income limits for taxpayers who want to claim medical expenses on their taxes. For the 2021 tax year, if your income is over $69,090 as a single filer or $138,200 as a joint filer, your medical expenses will be limited to a percentage of your AGI. This percentage changes depending on your income level.

B. Medical expense thresholds

In order to claim medical expenses on your taxes, you’ll need to meet another threshold. For the 2021 tax year, your medical expenses must exceed 7.5% of your AGI. For example, if your AGI is $50,000, you’ll need to have more than $3,750 in medical expenses before you can claim them on your taxes.

C. Forms needed by taxpayers to claim the expenses

If you’ve met the qualifications for claiming medical expenses, you’ll need to fill out Form 1040, Schedule A. This is the form you’ll use to itemize your deductions, including your medical expenses. You’ll want to make sure you have accurate records of all your medical expenses, including receipts and bills.

IV. Common mistakes while writing off medical expenses

While writing off medical expenses can save you money on your taxes, there are several common mistakes to avoid:

A. Claiming treatments not eligible for a tax deduction

As mentioned earlier, there are certain medical expenses that aren’t eligible for a tax deduction. Be sure you understand which expenses qualify and which don’t.

B. Claiming expenses that were covered by insurance

If your health insurance already covered a specific medical expense, you can’t also claim it as a tax deduction. Make sure that you’re only claiming expenses that weren’t covered by insurance.

C. Discuss other common mistakes

Other common mistakes include not meeting the income and medical expense thresholds, not having proper documentation, and not properly claiming the expenses on your taxes. To avoid these mistakes, it’s important to seek guidance from a tax professional if you’re unsure about any aspect of claiming medical expenses on your taxes.

V. Impact of Tax Cuts and Jobs Act of 2017 on writing off medical expenses

The Tax Cuts and Jobs Act of 2017 made several changes to the tax code, including how medical expenses can be claimed on taxes.

A. How the Tax Cuts and Jobs Act of 2017 affected writing off medical expenses

Prior to the Tax Cuts and Jobs Act of 2017, the AGI threshold for claiming medical expenses was 10% for all taxpayers. However, the new law lowered this threshold to 7.5% for tax years 2017 and 2018. This threshold has since been extended through the 2021 tax year, after which it’s set to increase back to 10%.

B. Impact on taxpayers since its enactment

The lower AGI threshold has made it easier for taxpayers to claim medical expenses on their taxes. However, it’s important to note that this threshold is temporary and will likely increase in the coming years. As a result, it’s important to stay informed about any changes to the tax code that could affect your ability to claim medical expenses on your taxes.

VI. Tips and advice for itemizing medical expenses

While claiming medical expenses on your taxes can be a great way to save money, it’s not always worth the effort and time. Here are a few tips and advice for determining whether itemizing your medical expenses is worth it:

A. Situations when itemizing medical expenses might not be worth it

If your medical expenses are close to the threshold for claiming a tax deduction, it might not be worth the time and effort it takes to itemize them. Additionally, if you’re not already itemizing your deductions, it might not be worth the trouble to start doing so just to claim your medical expenses on your taxes.

B. Offering tips to people unsure about itemizing medical expenses

If you’re unsure whether itemizing your medical expenses is worth it, consider seeking help from a tax professional. They can help you determine whether it’s worth the effort and offer advice on how to maximize your deduction.

VII. What to do if you missed the previous tax year’s deadline but still want to write off medical expenses

If you missed the deadline for claiming medical expenses on your previous year’s taxes, you still have options:

A. Options for claiming medical expenses

If you realize you missed a deduction on a previous tax return, you can file an amended tax return. This is done by submitting Form 1040-X to the IRS. You have up to three years after the original due date to file an amended tax return.

B. Reminders to be aware of specific deadlines

It’s important to keep in mind that there are specific deadlines for filing an amended return, so it’s best to take care of it as soon as you can. Additionally, make sure you have all the proper documentation before filing the amended return.

VIII. Conclusion

Writing off medical expenses on your taxes can be a great way to save money, but it’s important to understand what qualifies and how to do it properly. By following the guidelines outlined in this article, you can make sure you’re taking advantage of all the opportunities available to you as a taxpayer. Stay informed about any changes to the tax code that could affect your ability to claim medical expenses, and don’t hesitate to seek help from a tax professional if you’re unsure about any aspect of claiming medical expenses on your taxes.