Overlooked medical expenses for tax purposes

Since tax season is in full swing, I wanted to give you some specific Medicare and Health Insurance costs you can bring to your accountant.  As a reminder, you should run all of these expenses by a tax professional to ensure accuracy and eligibility!

If you are on Medicare, here is a list of items that you can potentially deduct from your taxes:

  • Medicare Part B premium – $104.90 x 12 = $1,258.80/year (2013)*
  • Chiropractic care
  • Dental and Vision expenses (things like glasses, contacts, teeth cleanings, crowns)
  • Home Modifications (Adding grab bars, handrails)
  • Hearing Aid Costs
  • Long Term Care insurance premiums
  • Prescription Drug Co-Pays (You must call your plan directly to ask for an annual cost for 2013.  Call the phone number on the back of your ID card)

*Part B Premiums have since changed

If you have Medicare + Supplement + Part D

You can deduct your Medicare Supplement and Part D premiums that you pay each year.  The easiest way to get this figure is to multiply your monthly amounts by 12 to get an annual figure.  You can also call your plan (using the phone number on the back of your ID card) to get an annual summary.

If you have a Medicare Advantage plan

With most Medicare Advantage plans, you don’t have a premium to deduct.  However, you can deduct your actual medical expenses (Doctor co-pays, costs for hospitalization, lab services, etc).  Again, you must call your plan directly and ask them what your Out of Pocket expenses were for 2013.  They should be able to give you a specific number.  While you have them on the phone, you can also ask them what your total out of pocket expenses were for your Part D benefit.

If you are a caregiver for a parent, spouse, or relative

There are specific tax breaks offered in this situation.  If you or someone you know are in this position, be sure to ask your professional about the most cost-effective way to handle this (claiming as a dependent vs taking their medical expenses as a deduction on your taxes)
This information was taken from the IRS publication 502.  A complete list can be found here: http://www.irs.gov/publications/p502/ar02.html#en_US_2013_publink1000178993