![]() Should the taxpayer reside in a nursing home primarily for other reasons, the IRS limits the deduction to the medical care provided. If a taxpayer is in a nursing home to receive medical care, the IRS says that the cost of that care and any lodging and meal costs borne by the taxpayer are deductible. That last item deserves further explanation. For a start, the IRS says the following expenses may qualify as tax deductible: out-of-pocket fees to medical and dental professionals, psychiatrists, psychologists, and certain nontraditional medical practitioners money spent to participate in a weight-loss program in response to a doctor-diagnosed condition or disease payments for prescription drugs and insulin payments for smoking cessation programs and prescription drugs to facilitate nicotine withdrawal money spent on inpatient treatment or acupuncture at a rehab facility and money spent on inpatient hospital care or residential nursing home care. What kinds of unreimbursed expenses qualify for the deduction? The list is long. If you are considering surgery or dental work that could mean sizable out-of-pocket expenses for you, it may be better from a tax standpoint to schedule these procedures for 2018 instead of 2019. (The Tax Cuts & Jobs Act of 2018 also allowed the 7.5% threshold to apply retroactively to the 2017 tax year.) Next year, the threshold for the medical expense deduction returns to 10% of AGI. This is a new threshold for 20, adjusted down from its previous value of 10 percent by the Tax Reform Act of 2017.If you itemize, you should note the reduced medical deduction threshold for 2018. This year, you can deduct qualified medical expenses exceeding 7.5% of your adjusted gross income (AGI). For example, if you had an adjusted gross income of $50,000 and had eligible medical expenses of $6,000, you are allowed to deduct $2,250, which is the remainder when 7.5 percent of $50,000, or $3750, is subtracted from $6,000. When you file Schedule A, Form 1040 with your federal income taxes, you can deduct medical and dental expenses in excess of 7.5 percent of your adjusted gross income. If you use a software preparation tool like Turbotax medical expenses will be calculated for you to determine if they qualify. In 2019, the threshold goes back up to 10 percent, which means the amount you pay this year will need to exceed 10 percent of your income in order for you to be able to able to claim it. 2018 Taxes and the 7.5 Percent ThresholdĪlthough you can still claim physiotherapy on tax, as well as mental health and other expenses, you'll only be able to claim expenses in excess of 7.5 percent of your income this year. Of course, any treatment paid by your insurance cannot be claimed, but you can claim the deductibles you paid, provided they meet the requirements. Treatment that doesn’t alleviate or prevent a specific condition, but is instead aimed at your general mental health, is not eligible. When a parent or nurse is needed to accompany the person who is receiving treatment, those transportation costs may also be deductible. For 2018, the allowable car deduction is 18 cents per mile. If you use your personal car, you can deduct the operating costs such as gas and oil. This includes fares for public transit, taxi or the cost of ambulance service if required. In addition to deducting amounts paid to medical providers and health care facilities, you can deduct transportation costs related to treatment. ![]() ![]() Some of the mental health and counseling services that are deductible include alcoholism and drug addiction treatment and smoking cessation programs. You also can deduct expenses related to treatment by a psychologist. The IRS allows you to deduct medical expenses associated with psychiatric care, including psychoanalysis. Your deduction may include the cost of counseling that you pay for yourself, your spouse or your dependents. These expenses may include services rendered by medical professionals, the cost of medical supplies and hospitalization costs. In the IRS Publication 502, which defines which medical expenses are eligible for deduction on a personal income tax return, medical care expenses are defined as expenses that alleviate or prevent a physical or mental illness or disability. As long as your counseling expenses are above the threshold set by the IRS, you can deduct them on your taxes.
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