Add up all those co-pays and prescriptions to see if they are tax deductible.
Each year, you should keep track of all the money that you personally pay for medical and dental bills that insurance does not cover. Many people do not realize that if they have high medical expenses, it may be beneficial to itemize deductions instead of taking the standard deduction. If you itemize deductions or have medical bills that run into thousands of dollars, you should see if your medical bills would qualify for a deduction on your federal income tax return.
Instructions
1. Enter your tax information on Form 1040. When you get to the section where you must take a standard deduction or calculate itemized deductions, stop and fill out Schedule A.
2. Enter the total for medical and dental bills that you paid in the tax year on line 1. If you are unsure of what you can claim, read Topic 502 - Medical and Dental Expenses. Some items that qualify are false teeth, guide dogs for the blind and crutches or wheelchairs. The list of items that qualify is lengthy.
3. Enter your adjusted gross income on line 2 of Schedule A. On line 3, multiply line 2 by .075 (7.5%) and enter the amount. You can only deduct medical expenses that exceed your adjusted gross income by 7.5 percent.
4. Subtract the amount on line 3 from the amount on line 1 and enter the amount on line 4. This is the amount you can deduct for medical expenses. If line 1 is less than line 3, you must enter "0" and cannot take a deduction for medical expenses.
5. Continue to fill out the rest of Schedule A. If the amount on line 29 is more than your standard deduction, enter this amount on line 40 of Form 1040. You can also elect to file the Schedule A, even if the amount on line 29 is lower than the standard deduction, but then you must check box 30 on Schedule A. Note, however, that if you elect to use a lower deduction on line 40 of Form 1040, your tax liability will be higher.
Tags: amount line, medical expenses, standard deduction, bills that, Form 1040, adjusted gross