05 Jan What medical expenses are tax deductible?
Photo: imelenchon/morguefile.comQ. I pay pre-tax premiums for health care to in my paycheck and I have a health savings account. Are there any medical expenses I can deduct?
— Trying to save
A. Health care costs can be a big line item in your budget. If you’re able to deduct some of the costs, it may take the sting out of it.
You can only deduct the amount of expenses that exceeds 10 percent of your adjusted gross income (AGI), said Altair Gobo, a certified financial planner with U.S. Financial Services in Fairfield.
If you’re 65 or older, you have a lower threshold, Gobo said. The expenses only need to exceed 7.5 percent of your AGI for 2016. The senior exemption will go away in 2017.
Not every expense is deductible, but lots are.
Equipment, such as crutches, wheelchairs, artificial limbs and hearing aids are deductible, Gobo said. So are dental services, doctor’s appointments, nursing services and hospital services — as long as you haven’t been reimbursed for the cost by your health insurance company.
If you renovate your home because of a medical condition or disease you may be able to deduct the costs, Gobo said.
The key is that deductible expenses must be unreimbursed expenses.
“That means if you pay for an expense but get reimbursed by your insurance company or anyone else, you can’t claim that expense as if you paid for it,” Gobo said.
He said you can claim expenses the year you paid them or when they were charged if you used a credit card.
Also, if you pay medical expenses from your Health Savings Account (HSA), you may not include these payments when considering your deductions.
“Make sure to keep any receipts from doctor visits and pharmacies, bank statements, and credit card statements showing where you paid for services, supplies, and any insurance premiums paid,” Gobo said. “Keeping track of your expenses will save time and headaches when filing your taxes.”
If you’re not sure, talk to your tax advisor or financial professional.
Email your questions to Ask@NJMoneyHelp.com.
This post was first published in January 2017.
NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.