Everything you need to know about how your health insurance plan factors into your 2018 taxes.
Medical expenses can add up, especially if you experience unforeseen emergencies that aren’t covered by your health insurance. The good news is that the Internal Revenue Service (IRS) has made some of these expenses partly tax-deductible.
How much can I deduct?
For the 2018 tax year, you can deduct qualified medical expenses that exceed 7.5% of your adjusted gross income. Beginning Jan. 1, 2019, all taxpayers may deduct only the amount of the total unreimbursed allowable medical care expenses for the year that exceeds 10% of their adjusted gross income.
Your adjusted gross income is your taxable income minus any adjustments, such as deductions, contributions to your IRA and student loan interest.
Which medical expenses are deductible?
Qualified medical expenses that you can deduct include preventative care, treatment, surgeries and dental and vision care. You can also deduct visits to psychologists and psychiatrists. Prescription medications and appliances such as glasses, contacts, and hearing aids are also deductible.
The IRS also lets you deduct the expenses that you pay to travel for medical care, such as care mileage and parking fees.
You cannot deduct any medical expenses for which you are reimbursed. You also cannot deduct expenses for cosmetic procedures, non-prescription drugs (except insulin), or general health purchases, like band aids, vitamins, or toothpaste.
How do I claim my medical expenses?
In order to claim your medical expenses as a deduction on your taxes, you need to itemize your deductions. Itemizing your deductions means that you do not take the standard deduction. You should only claim the medical expenses deduction if your itemized deductions are great than your standard deduction.
To learn more about how to itemize your deductions, including your medical expenses, we recommend consulting a tax professional.
This information is current for the 2018 tax year. For more information, including a complete listing of deductible medical expenses, visit the IRS website at https://www.irs.gov/taxtopics/tc502
This article is intended to provide generalized tax information. It does not give personalized tax advice.