Keeping Track of Out-of-Pocket Medical Expenses for Tax Time

Posted July 20, 2011 Company News

Are you struggling with a serious illness and have considerable out-of-pocket health care expenses that are not covered by insurance? Do you find your transportation cost significant when traveling back and forth to health care providers for essential treatment?

Don’t forget that you may be able to deduct on Schedule A (Form 1040) the amount of your medical and/or dental out-of-pocket expenses that exceed 7.5% of your Adjusted Gross Income (Form 1040, line 38). Deductible expenses include transportation cost that is primarily for, and essential to, medical and dental care. Take the time to keep track of your out-of-pocket expenses so that you can take advantage of this deduction at tax time, if it applies. Charges reimbursed by a Flexible Spending Account or Health Savings Account and premiums paid for health and dental coverage with pre-tax payroll dollars can not be included. Please refer to IRS Publication 502 for more information about the itemized deductions you can claim on Schedule A (Form 1040).

Please also note that on June 23, 2011, the Internal Revenue Service announced an adjustment to the medical expense standard mileage rate, increasing the rate from 19 cents to 23.5 cents. This new six-month standard mileage rate for computing deductible medical and dental expenses will apply from July 1, 2011 to December 31, 2011. The revised standard mileage rate set forth in the IRS announcement applies to deductible transportation expenses paid or incurred for medical purposes on or after July 1, 2011.

 

Resources:

IRS.gov News Release: http://www.irs.gov/newsroom/article/0,,id=240903,00.html

Publication 502: http://www.irs.gov/publications/p502/index.html

 


Please note that the information contained in this document is designed to provide authoritative and accurate information, in regard to the subject matter covered. However, it is not provided as legal or tax advice and no representation is made as to the sufficiency for your specific company’s needs. This document should be reviewed by your legal counsel or tax consultant before use.