By Harry S. Margolis
If you have large medical expenses you may be able to deduct a portion of them from your taxes. For most taxpayers, you can deduct such medical care to the extent they exceed 10% of your adjusted gross income. So, for instance if your income is $50,000 a year, you can deduct your medical expenses, including health insurance premiums, to the extent they exceed $5,000.
For taxpayers who are 65 and older, the threshold is 7.5% of adjusted gross income. So, if you (or your spouse) is over 65 and you have an income of $50,000, you can deduct medical expenses in excess of $3,750 instead of $5,000.
In calculating expenses that you may deduct, include the following:
- All payments for doctors, dentists, therapists and chiropracters.
- In-patient costs, including nursing homes and assisted living if your physician certifies that you need to be in assisted living for medical reasons (see below).
- In-patient alcohol or drug addiction treatment.
- Weight loss treatement if it’s related to a diagnosis.
- False teeth, glasses, contact lenses, hearing aids.
- Transportation for medical care.
To deduct assisted living costs, you must meet three criteria:
- You must be living in the facility primarily for medical reasons.
- A doctor or nurse must certify that you cannot perform at least two activities of daily living (eating, bathing, dressing, transferring or using the bathroom) or you require supervision due to a cognitive impairment such as Alzheimer’s disease).
- Personal care services are provided according to a plan prescribed by a licensed health care provider.
If you do not meet all three of these requirements, you still may be able to deduct the portion of the assisted living fee attributable to personal care, but not for room and board.
You may only take these deductions if you itemize. You may also deduct the medical costs you pay for dependents.
While all health and dental insurance premiums are deductible, premiums for long-term care insurance premiums are deductible up to certain limits depending on your age. The limits for 2014 are as follows:
Age 40 or less $370
41 – 50 $700
51 – 60 $1,400
61 – 70 $3,720
Over 70 $4,660
If you have any questions about any of these deductions, check with your accountant.