Wang Solutions

Good for Your Health, Good for Deductions

Staying healthy and beautiful is not easy – on your wallet, that is. Luckily, those filled cavities and x-rays may be cheaper than you think. You can actually get a tax deduction for medical or dental expenses not covered by insurance.

There’s just one catch: you must itemize deductions on your tax return. Okay, there’s one more catch: deduction is limited. You can only deduct medical and dental expenses that are more than 7.5 percent of your adjusted gross income.

Still, that’s better than nothing. And you can include pretty much any medical or dental costs that you paid for yourself, your spouse, and your dependents. This means everything from expenses for diagnosing, treating, easing or preventing disease, to prescription drugs and insulin, to medical, dental and some long-term care insurance. 

It gets even better. As long as the expenses were paid in 2013, you can deduct the cost of services received in a previous year. So procrastinating on your bills might just pay off. 

You might be asking, can I get a break on the money I spent driving back and forth to the doctor’s? The icing on the cake is that the cost of travel to obtain medical care is included. You can deduct the actual costs, including gas and oil, or you can deduct the standard mileage rate for medical travel (24 cents per mile for 2013). Travel also includes the cost of public transportation or an ambulance, as well as tolls and parking fees. 

Finally, be aware that you can’t double dip. Funds from Health Savings Accounts or Flexible Spending Arrangements used to pay for medical or dental costs are already tax-free, so you can’t deduct expenses paid with funds from those plans. For more on deductions, check out IRS Publication 502, Medical and Dental Expenses.