Know the type of medical expenses on which you are not required to pay tax.
The definition of IRS for medical expenses is, “A deduction is allowed only for expenses paid for the prevention or alleviation of a physical or mental defect or illness. Medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or treatment affecting any structure or function of the body." IRS has set a cut off point at 7.5% for deducting the tax in medical expenses. It means that it is permissible to count the medical expenses that are more than 7.5% of your gross medical expenses. Keeping this limit in mind, you need to carefully plan your medical expenses and see how you can get maximum tax benefit. Here are some of the points that would help you to know what qualifies for deduction and the amount that can be deducted:
- Some of the common tax deductible expenses are hospital bills, doctor visits and health insurance premiums.
- Apart from that there are several other expenses that are covered in the same list such as:
- Amount spent in artificial limbs or teeth.
- Cost of hearing aid and eye glasses.
- Fees paid to chiropractor.
- Transportation and lodging charges while travelling for treatments.
- Amount spent in modifying your home on medical grounds and for purchasing and looking after a guide dog.
- Laboratory charges.
- Some of the things that are not covered in this list are as follows:
- Membership charges of a gym or health club.
- Expenses incurred on cosmetic surgery.
- Veterinary charges for pets.
- It should be noted that the medical expenses which have been reimbursed cannot be included in the list of tax deduction.
- If you make advance payment for any sort of medical treatment, it will deductable only in case the service is delivered.
While opting for tax deduction on medical expenses, you need to fill up a form in the income tax return after totalling your annual medical expenses. Moreover, make sure that you save all the medical bills and the payment statements as proof of your expenses.
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