Monday, August 13, 2012, AM | 2 Comments
Whether the Administration is run by Democratic Party President or Republican, healthcare will never be the same as was 30 or so years ago. The expenses for it are so great that paying for medical and dental care has become extremely challenging for an increasing number of Americans, even for those with good health insurance coverage.
Family health care premiums have increased 113 percent since 2001 according to the Kaiser Family Foundation’s 2011 Employer Health Benefits Survey.
Financial help may be available…
The average worker contributed more than $4,100 toward employer-provided family health coverage in 2011, an amount that doesn’t include out-of-pocket costs such as deductibles, co-payments, and co-insurance.
If you’ve spent a significant amount of money on health care, financial relief may be available in an unlikely place – as an itemized deduction on your federal income tax return.
You can deduct medical and dental expenses that have not been reimbursed and that exceed 7.5 percent of your adjusted gross income.
That includes expenses paid for you, your spouse, and dependents in 2012. Even if the service was provided in 2011, you can count the expense if it was paid for in 2012.
Care includes the diagnosis, cure, mitigation, treatment, or prevention of disease, and treatments affecting any structure or function of the body.
Qualified expenses paid for you, your spouse, and dependents may include:
Premiums paid on health insurance for medical care and long-term care insurance policies covering qualified long-term care services.
Fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners.
Inpatient hospital care or nursing home services.
Drugs that require a prescription and insulin.
Smoking-cessation programs and prescription drugs to alleviate nicotine withdrawal.
Weight-loss program for specific disease(s), including obesity, diagnosed by a physician but not ordinarily, payments for diet food items, or the payment of health club dues.
Acupuncture treatments or inpatient treatment at a center for alcohol or drug addiction.
Admission and transportation to a medical conference about a chronic disease (costs must be primarily for and essential to medical care).
False teeth, reading or prescription eyeglasses or contact lenses, hearing aids, crutches, wheelchairs, and for guide dogs for the blind or deaf.
Transportation costs primarily for and essential to medical care such as fare for a taxi, bus, train, or ambulance.
If you are using your personal car, you can deduct either your out-of-pocket expenses for gas and oil or the standard medical mileage rate of 23 cents per mile.
In a Nutshell
Between now and tax time, keep documentation of expenses organized. Save receipts, keep detailed notes, and save all information in one place.
That will save time when you do your taxes, and you will have all the information you will need to substantiate your expenses in the unlikely event of an audit.
Starting in 2013, the adjusted gross income threshold for deductible medical and dental expenses increases to 10 percent.