Are copays for prescription medications tax deductable?

Question

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Answer 1

Yes, but they have to be more than 7.5% (not 7%) of your Adjusted Gross Income (AGI) or the amount on the last line of the front page of your 1040 or 1040A. If all of your out-of-pocket medical expenses exceed 7.5% of your AGI, the excess will go on your Schedule B next to medical expenses.

However, your total Schedule A (thanks Awaken) amount must exceed your standard deduction in order for it to make a difference. Most non-home owners don't use Schedule A because the standard deduction is so high. If you are single, your standard deduction (for 2005) was $5,000. Married? it was $10,000. If, in 2005 you did not use a Schedule A and your tax situation didn't change for 2006, then you probably won't use a Schedule A in 2006 either.

It is best to save receipts for all out-of-pocket medical expenses: co-pays (hospital, doctor, dentist, psychologist), prescription drugs, prescription eyeware (including prescription sunglasses, contacts, contact cleaner), and post-tax medical insurance premiums. If you medical insurance is through your employer, chances are they are pre-tax...but ask to make sure. Give these expenses to your tax preparer at the end of the year. I'd rather see you have it and not need it than need it and not have it. Try to lower your AGI by putting as much into your 401(k) and IRA as you can. The lower your AGI, the more credit you get for medical expenses and other things as well.

Good luck!

Answer 2

Yes, but your medical bills have to make up 7% of your earnings in order to count them.

You should check into section 125 plans. Your employer might want to look into starting one.

Answer 3

Yes and if your insurance is not paid with "pretax" dollars, you can take them as a deduction also.

Answer 4

Yes they are and the above info is mostly correct except it is schedule A not ...B.

good luck

Answer 5

yes, for the amount over 7% AGI (adjusted gross income)