How to Deduct Medical Expenses on Taxes
Review the list of deductible medical expenses on the IRS website., Keep your receipts from medical costs throughout the year., Keep a spreadsheet of all your medical expenses., Keep track of family members' medical expenses., Remove any medical...
Step-by-Step Guide
-
Step 1: Review the list of deductible medical expenses on the IRS website.
Search for Publication
502.
Read the detailed list of deductible and ineligible medical expenses for the current tax year.
The deductible medical expenses list does change from year to year, so do not judge based on a previous years' IRS publication. , Create a file where you can put all your receipts for everything from health insurance premiums to transportation expenses to and from medical appointments.
By making an effort to keep them throughout the year, you are more likely to have a complete list of verifiable expenses at the end. , Include columns for the date, service, service provider, doctor prescribing the service and notes.
Update your medical expenses based on your receipts monthly, or after each expense.
Set your spreadsheet to keep a running tab of your medical expenses.
On both Microsoft Excel and open source spreadsheet programs, you can select the column that you want to be added and click the "Formula" button.
Select the cells you would like it to add, and there should be a total that changes as you add more entries into the "Cost" column. , Your medical expenses should include everyone who is included in your tax return, such as a spouse or children.
However, it can also include other family members' expenses that you pay for, as long as it is not claimed on their own tax returns.
You should also collect original receipts for family medical expenses. , It is illegal and fraudulent to deduct any medical expenses for which the financial burden did not fall on you. , AGI is calculated subtracting a short list of expenses from all of the income you received from various sources during the year.
Gather your W-2s and other forms, for you and your spouse, that show what income you received in the last year.
Gross income includes the following income you may have received in the current financial year: wages or salary, bonuses, rents, royalty, alimony, interest, dividends, pensions, income from a business operation, annuities and income tax refunds.
Adjustments to gross income include the following payments made during the current financial year: business expenses, alimony paid, Health Savings Plan contributions, one half of self-employment tax, contributions to IRA retirement accounts, college tuition and some moving expenses. , You should be able to take the total of your spreadsheet at the end of the year.
Add medical expenses from each family member together. , However, if this number is less than your total medical expenses, subtract this number from your medical expenses.
The result will be the total amount you can deduct for medical expenses.
If this number is more than your total medical expenses, you cannot deduct your medical expenses.
For example, if your AGI was $50,000 and you spent $6,940 on deductible medical expenses in 2011, then you could itemize a deduction for medical expenses.
This is because
7.5 percent of $50,000 is $3,750, less than what you spent on medical costs.
Your total deduction would be $6,940 minus $3,750, or $3,190. , This is also called IRS Form
1040.
You cannot deduct medical costs if you use the Form 1040 EZ, a form with fewer blanks for people with few deductions. , Enter your deductible medical expenses in blank number 1 and your AGI in blank number
2.
Enter
7.5 percent of your AGI in blank number 3 and that amount subtracted from your medical expenses in blank number
4.
If your medical expense total is lower than
7.5 percent of your AGI, you will enter "0" in blank number
4. , You can submit your taxes by mail, through a tax preparer or by using the e-file process.
Although you do not need to send in your medical receipts, you should keep them and your spreadsheet in case of an audit. -
Step 2: Keep your receipts from medical costs throughout the year.
-
Step 3: Keep a spreadsheet of all your medical expenses.
-
Step 4: Keep track of family members' medical expenses.
-
Step 5: Remove any medical expenses that are reimbursed by the doctor
-
Step 6: an agency or an insurance company.
-
Step 7: Calculate your Adjusted Gross Income (AGI) at year's end.
-
Step 8: Total your deductible medical expenses from the current tax year.
-
Step 9: Multiply your AGI by 7.5 percent
-
Step 10: or 0.075.
-
Step 11: Request a Schedule A from the IRS
-
Step 12: or print a copy online at IRS.gov.
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Step 13: Fill in the top of the Form 1040
-
Step 14: which says "Medical and Dental Expenses."
-
Step 15: Complete your taxes and send them in before the due date in April.
Detailed Guide
Search for Publication
502.
Read the detailed list of deductible and ineligible medical expenses for the current tax year.
The deductible medical expenses list does change from year to year, so do not judge based on a previous years' IRS publication. , Create a file where you can put all your receipts for everything from health insurance premiums to transportation expenses to and from medical appointments.
By making an effort to keep them throughout the year, you are more likely to have a complete list of verifiable expenses at the end. , Include columns for the date, service, service provider, doctor prescribing the service and notes.
Update your medical expenses based on your receipts monthly, or after each expense.
Set your spreadsheet to keep a running tab of your medical expenses.
On both Microsoft Excel and open source spreadsheet programs, you can select the column that you want to be added and click the "Formula" button.
Select the cells you would like it to add, and there should be a total that changes as you add more entries into the "Cost" column. , Your medical expenses should include everyone who is included in your tax return, such as a spouse or children.
However, it can also include other family members' expenses that you pay for, as long as it is not claimed on their own tax returns.
You should also collect original receipts for family medical expenses. , It is illegal and fraudulent to deduct any medical expenses for which the financial burden did not fall on you. , AGI is calculated subtracting a short list of expenses from all of the income you received from various sources during the year.
Gather your W-2s and other forms, for you and your spouse, that show what income you received in the last year.
Gross income includes the following income you may have received in the current financial year: wages or salary, bonuses, rents, royalty, alimony, interest, dividends, pensions, income from a business operation, annuities and income tax refunds.
Adjustments to gross income include the following payments made during the current financial year: business expenses, alimony paid, Health Savings Plan contributions, one half of self-employment tax, contributions to IRA retirement accounts, college tuition and some moving expenses. , You should be able to take the total of your spreadsheet at the end of the year.
Add medical expenses from each family member together. , However, if this number is less than your total medical expenses, subtract this number from your medical expenses.
The result will be the total amount you can deduct for medical expenses.
If this number is more than your total medical expenses, you cannot deduct your medical expenses.
For example, if your AGI was $50,000 and you spent $6,940 on deductible medical expenses in 2011, then you could itemize a deduction for medical expenses.
This is because
7.5 percent of $50,000 is $3,750, less than what you spent on medical costs.
Your total deduction would be $6,940 minus $3,750, or $3,190. , This is also called IRS Form
1040.
You cannot deduct medical costs if you use the Form 1040 EZ, a form with fewer blanks for people with few deductions. , Enter your deductible medical expenses in blank number 1 and your AGI in blank number
2.
Enter
7.5 percent of your AGI in blank number 3 and that amount subtracted from your medical expenses in blank number
4.
If your medical expense total is lower than
7.5 percent of your AGI, you will enter "0" in blank number
4. , You can submit your taxes by mail, through a tax preparer or by using the e-file process.
Although you do not need to send in your medical receipts, you should keep them and your spreadsheet in case of an audit.
About the Author
Donna Hernandez
Creates helpful guides on pet care to inspire and educate readers.
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