We often hear the question: “Are my medical expenses deductible?” As usual, the answer is it depends. While there is a qualified medical expenses deduction allowed for taxpayers that itemize, very few of these tax payers qualify. The catch is that you can only deduct the portion of the expenses that exceeds 7.5% of your adjusted gross income. For example, if your adjusted gross income was $80,000 and your medical expenses were $7,000, you would be able to deduct $1,000. This is computed by multiplying your adjusted gross income ($80,000) by 7.5% which computes to $6,000. If that amount is smaller than your total medical expenses, you then deduct that amount from your medical expense and the amount left over is your allowable deduction ($7,000 – $6,000 = $1,000).
In order to qualify, the medical expenses must be for the diagnosis, cure, mitigation, treatment, or prevention of disease or any treatment that affects a part or function of your body (or the body of a spouse or dependent).
Be sure to keep up with a detailed log of all of your miles that you drive related to medical expenses as these may be deductible also. Be sure to retain all canceled checks, receipts, and any other evidence of the medical expenses that you incurred. Even if you do not think you will hit the level you will need to in order to deduct these expenses, it is a good idea to save the documentation because you never know what might happen later in the year to drive up your medical cost.
Donna Bordeaux, CPA with Calculated Moves
Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna and Chad Bordeaux. They have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.