Can you claim medical bills on your income tax?

Question

We have paid approximately $8,000 in medical bills. Can we claim this on our income tax & get a bigger refund? (We do have an accountant do our taxes).

Answer 1

Hello, Daisy! Yes, medical Expenses can be claimed at the top of Schedule A as an itemized deduction, BUT - only to the extent that they exceed 7.5% of your adjusted gross income.

This means that if (for example) your AGI was $60,000 and you had $8,000 of medical expenses, you would only be able to deduct $3,500 ($8,000 of expenses less $4,500 [$60,000 x 7.5%]). Thus, the higher your AGI, the less medical expenses you get to deduct. And remember: "medical expenses" include a lot more than doctor visits, emergency care, etc. If you tracked any related travel and transportation costs (mileage, airfare, or hotel costs while out of town for medical reasons, for example), they are also deductible (the 2006 rate for medical-related mileage is $0.18/mile). Furthermore, any health insurance premiums you paid during 2006 may also qualify (unless they were deducted from your paycheck pre-tax), increasing that deduction even more. Check out the IRS links below for further details.

Your accountant will be able to help you decide whether or not you should itemize (you are allowed to choose the greater of standard or itemized deductions). For your 2006 return, the standard deduction is $5,150 for Single and $10,300 for Married Filing Jointly. Since your medical expenses are limited, you would need enough other itemized deductions to exceed whatever your standard deduction is.

Make sure you give your accountant any state taxes, mortgage interest, charitable contributions, etc, that you paid in 2006, and he/she will help do the calculations. Good luck!! :-)

Answer 2

Maybe. Since you say "we" I'm assuming that you file a joint return. On a joint return you get a standard deduction of $10,300 if you're both under 65, a little more if one or both of you is 65 or over. You have a choice of taking that amount, or itemizing if it's more.

For medical bills, you have to subtract 7.5% of your income first, and can only deduct the amount over that. If what's left of the medical bills plus any other itemized deductions that you have totals more than your standard deduction, then you can itemize, and will pay less total tax if you owe any.If your total tax without itemizing is already zero, then it won't make any difference.

Answer 3

Yes you can, if you have enough expenses (and it sounds like you will in your case). Be sure to show all that stuff to the person who prepares your tax return.

Answer 4

Yes, you can.