Taxes and Medical Expenses – What you need to know

millss — Fri, 11 Apr 2008 19:37:01 GMT

April 15 is fast approaching. For those of us who haven’t submitted our tax returns to the Internal Revenue Service (IRS), here’s some information about deductible medical expenses that may make tax time less stressful. There’s a whole list of possible deductions from acupuncture to transportation on the IRS website.

Here are a few things that you may be able to deduct if you or certain family members have medical expenses related to a blood cancer or other medical conditions:

Capital Expenses – These would include special equipment that you’ve installed in your home, or actual renovations to your home that is in direct relation to your condition (for example, widening doorways for wheelchair access).
Hospital Services – This would include inpatient care at a medical facility (for example, meals and lodging related to medical care).
Medical Conferences – Being able to deduct this would require that you have attended the conference in direct relation to the patient’s illness, but note that meals and lodging cannot be included.
Nursing Services – These services can be in home or in another care facility.
Wig – In general, you can deduct the cost of a wig purchased with a physician’s advice for a patient who has hair loss that is disease-related.

A few things to keep in mind:

Use Section A, Form 1040 to report medical deductions. Learn more about how to fill out this form.
To submit medical deductions, you need deductible expenses that equal more than 7.5% of your adjusted gross income. Let’s say your adjusted gross income is $50,000. You would need to have at least $3,750 in medical expenses to be eligible for a deduction.
You can only deduct medical expenses that were paid this year. In other words, what matters is when you or your dependents paid for medical procedures or devices, not when you received them.
A list of things that you will not be able to deduct can be found on the same page as the list of expenses you can deduct.

Even if you have already submitted your tax return to the IRS for 2007 this is information that can be of help for next year. If you expect to continue to pay for medical expenses this year, make sure you keep your records handy for when you meet with your accountant or when you fill out your taxes.

Find more information about your finances and health matters.

Have you already turned in your tax return? Do you have ideas to share about organizing your tax receipts, especially medical expenses?

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Taxes and Medical Expenses – What you need to know