If your deductions are itemized and dental and medical expenses are anticipated to be included then with the help of IRS publication 502 you can determine which expenses will actually qualify during a tax year. After calculating the sum of all the medical and dental bills that are deductible, you can deduct any portion that exceeds 7.5% of your AGI.
Dental and medical expenses that you incurred for prevention, diagnosis and treatment of either physical or mental illness are defined by IRS publication 502. Equipment expenditure and cost of diagnostic services are also included along with the supplies that are necessary for servicing these particular conditions. Apart from the prescribed medication insulin is the solitary nonprescription material that can be deducted and cosmetic surgeries are not also covered by the IRS definition.
Eligibility for Deduction:
According to the guidelines set forth by IRS publication 502 an American tax-payer can claim deductions during a tax year if the expenses are actually incurred. As per the guidelines, if the payment for a certain treatment is made one year and the treatment actually takes place in the following tax year, the expenses can be reported on the tax return of the previous year. According to this publication an expense is to be reported in the year, during which it was incurred and not with the year when the services were actually received.
Self Employed Health Insurance Premiums
For self-employed US citizens having a net profit for any particular year the premiums paid for health insurance policies covering medical expenses and long-term care services are also deductible. Apart from the payments made to doctors and other health care professionals, in-patient hospital and nursing home care, acupuncture treatments, cure for alcohol and drug addiction and payment made to weight loss programs and certain diseases may also be deducted. But burial expenses, medicine bought over the counter, health improvement tours and cosmetic surgeries are not deductible.
How to Claim?
In order to claim deductions on your dental and medical expenses under IRS publication 502 your tax return must be filed on Form 1040. Along with the deductions itemized, all other expenses sans premiums paid for health insurance by self-employed citizens a Schedule ‘A’ attachment is to be used. For self employed tax-payers Form 1040 is to be directly used for deduction of their insurance premiums. Any other cost incurred in addition to this must also be mentioned in the Schedule ‘A’ attachment.
Apart from that. to make medical expenses and insurance premiums deductible they must also be paid with after tax money. This implies that medical expenses paid through Health Savings Accounts or expenses that are withheld from the paycheck and are paid through pre-tax money are not covered for tax deduction under IRS publication 502. This particular publication is normally used by tax-payers for determining deductible medical expenses without any regard to the time when the service was actually provided. You can also use the Section 125 health plans along with IRS publication 502 to determine the expenses covered by this publication.