15 Jan The tax bill and medical expense deductions

Q. A member of my family had to go for radiation treatments and I had to transport him/her to get the service. The person does not live with me but has an apartment. Can I deduct the mileage from my income tax?
— Looking for savings

A.  We’re glad you were able to help your family member, and we hope he or she is healthy.

In order to deduct medical expenses on your tax return, you have to clear a pretty high hurdle, said Matthew Masterson, a certified financial planner with RegentAtlantic in Morristown.

He said in order to be deductible, your total medical expenses must exceed 10 percent of adjusted gross income.

“For example, if you have adjusted gross income of $100,000 for 2017, you can only deduct medical expenses in excess of $10,000,” he said. “In this case, if you had $12,000 of medical expenses, $2,000 would be deductible.”

Masterson said transportation costs for medical expenses can be deductible but they have to meet a few qualifications for that to be the case.

First, he said, the transportation has to be for you, your spouse or a dependent and it must be primarily for and necessary to medical care.

“For your out-of-pocket car expenses, you can include the cost of gas and oil but cannot include depreciation, insurance or repair and maintenance expenses,” Masterson said.

As an alternative, you can utilize mileage. For 2017 you may deduct 17 cents per mile for medical expenses, he said.

The medical deduction was on the chopping block for 2018 tax reform.

The final bill allows for medical expenses in excess of 7.5 percent of your adjusted gross income (AGI) to be deductible, which is a change for those under 65 who had a higher 10 percent threshold.

But the 7.5 percent is only for 2017 and 2018, and will increase to 10 percent in 2019.

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This post was first published in January 2018.