Are Medical Bills a Deduction for Taxes?

by Louise Balle, Demand Media

    You can deduct a number of common personal expenditures on your income taxes, including mortgage interest, property taxes and charitable donations. In some cases you can also list medical expenses as long as the amount you want to deduct meets some conditions. If allowed in your case, this deduction helps decrease your final tax bill.

    Where to Deduct

    If you can deduct medical bills it will be on form 1040 Schedule A. The deduction applies if you itemize instead of taking the standard deduction allowed by the IRS. Under the "Medical and Dental Expenses" section is a short worksheet you can use to determine your deductible medical expenses, including dental bills you paid during the tax year.

    Conditions

    The first condition you need to know about deducting medical bills is that you cannot list items that were reimbursed by insurance or paid by another party. The amount you're planning to deduct has to be a cost that you paid out of your own pocket less reimbursements. Next, the amount you wish to deduct has to exceed 7.5 percent of your adjusted gross income (AGI). Finally, you need to make sure it's a covered medical treatment. That includes but is not limited to insurance premiums, medication, exams and hospital visits. See Schedule A instructions under "Medical and Dental Expenses" for the full list of covered expenses. You also have limits on the amount of long-term care premiums you can deduct.

    Calculation Example

    So let's say you have determined your total eligible medical expenses at $5,000. Enter that amount into line one of the "Medical and Dental Expenses" section in Schedule A. Next, write in your adjusted gross income (use $40,000 as an example) into box two. Multiply that amount in box two by 7.5 (.075), which equals $3,000. Subtract that total from your eligible medical expenses to get $2,000, which is your total deductible amount.

    Other Considerations

    Keep in mind that if you claim a spouse and other dependents on your tax return, you can include those medical bills as well. That includes any expenses for a deceased dependent during that tax year. If you take this deduction, make sure you keep a copy of all of your medical bills and payment receipts with your tax paperwork.

    About the Author

    Louise Balle has been writing Web articles since 2004, covering everything from business promotion to topics on beauty. Her work can be found on various websites. She has a small-business background and experience as a layout and graphics designer for Web and book projects.