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To deduct medical expenses they must exceed 10% (or 7.5% if you are 65 or older) of your income, and only that portion that exceeds 10% is deductible. For example, if you earn $50,000 as adjusted gross income, then only the medical expenses that exceed $5,000 are deductible. Please summarize your medical expenses and describe them below.

 

Here is the IRS list of Qualified Medical Expenses.

 

We do not need your receipts. If you have another log such as a spreadsheet or a summary, you can send that to us in lieu of completing this form.

 

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Qualified Medical Expenses

Did you have any other travel expenses? Travel expenses are only deductible for the person receiving medical treatment, and in some cases a caretaker. If this applies to you, please explain below-

Do you have any other expenses such as caretakers, dentistry, medical supplies, etc?

Qualified Medical Expenses for Others

You are able to deduct medical expenses for others even if they do not qualify as a dependent but you must have provided over 50% of his or her support. For example, your mother earns over $3,950 and therefore cannot be your dependent. But, you provide over 50% of her support. You can deduct the medical expenses that you paid. So, if this applies to you, please describe below-

A bit of caution however. It does not make sense to pay for medical expenses if you cannot deduct them. For example, your same mother above might be able to deduct medical expenses because she has a much lower income. If she can deduct the medical expenses and you cannot because of income thresholds, you should gift the money to your mother and have her pay the expenses directly. She gets the deduction that otherwise would have been lost. Talk to us if you need help.

Health Savings Accounts (HSA)

HSAs are becoming more popular as employers move to consumer driven health plans (CDHPs). A form 1099-SA is used to report the tax consequence, however they typically do not provide all the information necessary for the preparation of your tax return.

 

If you received any 1099-SAs please provide a copy and complete the following. You can also jot this information down on the form as you send it in. A code W in Box 12 on your W-2 simply means that an HSA contribution was made by your employer and / or by you. You will only get a 1099-SA if you had withdrawals from your HSA.

Self / Single     Family

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Submission

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Medical expenses such as co-pays, prescriptions and out-of-pockets payments may be deducted. In addition, there are some things that are strictly not deductible such as diet pills or food, non-prescription medications, vitamins and imported drugs not approved by the FDA.

However, there are some shades of gray- dental procedures are a great example. There might be situations where a procedure such as tooth veneers could be considered both cosmetic and health-related (gingivitis prevention, toothache, etc.). More discussion would be required.

Please note that health insurance premiums (including vision and dental) generally do not qualify since these are already paid pre-tax giving you an instant tax savings. To deduct them again would be double-dipping. On rare occasions (such as business owners), your health insurance premiums might be deductible.

The 2014 tax year with Affordable Care Act will be a completely different story- contact us if you need some guidance.

Lastly, only those medical expenses that exceed 10.0% (or 7.5% if you are 65 or older) of your adjusted gross income are deductible. For example, if you earn $30,000 your medical expenses must exceed $3,000, and only that portion which exceeds $3,000 is deductible.

We understand that the issue of medical benefits and expenses is a sore spot for most clients, and the information above probably doesn't help alleviate the bad taste. Unfortunately it is the current tax code.