The IRS allows for certain medical expenses to be deducted on the Schedule A of your 1040 tax return. Don't overlook some of these expenses as deducting them may save you money!
Here is a general list of what’s deductible:
- Payments to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and other medical practitioners
- Hospital and nursing home care
- Acupuncture
- Addiction programs, including for quitting smoking
- Weight-loss programs for doctor-diagnosed diseases, including obesity (but diet food and health club dues usually don’t count)
- Insulin and prescription drugs
- Admission and transportation to medical conferences about diseases that you, your spouse or your dependents have (but meals and lodging don’t count)
- Dentures, reading or prescription eyeglasses, contacts, hearing aids, crutches, wheelchairs and service animals
- Transportation costs to and from medical care
- Insurance premiums for medical care or long-term care insurance if they’re not paid by your employer and you pay out of pocket after taxes
A recent addition to this list is that COVID-19 home test kits and personal protection equipment (PPE) such as masks, hand sanitizer, and sanitizing wipes are also deductible! As long as they are used to specifically for COVID related care and prevention. In addition, as eligible medical expenses, you can pay for COVID-19 home testing kits and PPE with money in a health flexible spending arrangement (health FSA), health savings account (HSA), health reimbursement arrangement (HRA), or Archer medical savings account (Archer MSA).
An excellent article from Kiplinger's Magazine (our favorite personal finance magazine) goes into further detail. See more through this link: https://www.kiplinger.com/taxes/tax-deductions/603429/covid-19-home-test-kits-and-ppe-are-tax-deductible
Also, don't forget to deduct your health insurance premiums, including Medicare and Medigap or Medicare Advantage premiums as well.
Long term care insurance premiums are also partially deductible (the percentage is on an age-based graduated schedule).
And of course we all are carefully recording our mileage to and from medical appointments! This can add up (particularly with parking fees tossed in).
As a final reminder, only medical expenses that exceed 7.5% of your adjusted gross income are deductible. And even then, you might not see any additional tax savings if your total itemized deductions don't exceed your standard deduction. Still, it's worth tallying up these costs during tax time.