How to Use Your Medical Expenses For a Tax Write Off
As tax season draws nearer, many Americans are beginning to examine their 2013 expenses and assess which items they may be able to write off in order maximize the amount of refund they may be eligible for or minimize the amount of taxed they must pay. There are many different types of expenses that can be written off on a tax return, and one of them is medical expenses.
If you have never written off medical expenses you may be unsure as to how exactly to write off medical expenses or what constitutes an appropriate medical expense write off. Here are some tips on how to write of medical expenses as you head into the 2013 tax season.
Calculate the Amount of Expenses You Are Eligible to Write Off
When it comes to writing off medical bills, one of the most important factors the IRS considers is the amount of your medical expenses against your yearly income. Before consider how much money you can deduct for funds spent in medical expenses, you should determine how high your expenses must be in order to qualify for a deduction.
To do this, start with your annual gross income, and then find 7.5% of that amount. Next, deduct that amount from the total money you spent on medical related costs for the year. The difference is how much you are allowed to deduct.
If Possible, Group Procedures Together to Increase the Amount That You May Be Able to Deduct for a Certain Calendar Year
Because medical expenses must reach a certain amount in order for them to be eligible for deduction, it can be beneficial to group together big ticket procedures. This is, of course, not always possible, but if you are headed toward the end of the year and realize that you need a slightly elective surgery or a medical device, consider getting both before the year’s end. Doing this can help greatly increase your odds of being able to deduct your expenses for the year.
Read Up On What Medical Expenses Are In Fact Deductible
The good news when it comes to medical deductions is that a number of items are in fact deductible. You can read up on exactly which procedures qualify in the IRS’s Publication 502, but should be aware that items like building additions to your residence or auto to help with livability in the face of an injury or disability are eligible for deduction.
You can also deduct travel expenses if you must go to a different city in order to receive medical care. Guide dogs and therapy dogs, and their related expenses, such as training and food can also be deducted. Therapeutic procedures like therapy massages can be deducted, as can technological additions to your home, like tools to help with seeing or hearing impairment. This is all in addition to other, more traditional expenses like prescription drugs, including birth control and fertility treatments can also be included in your deduction.
Keep Good Records
As with any tax deduction, the key to safely and effectively writing off expenses is to keep detailed and well organized records of your expenses. Save all bills and invoices and, if possible, keep them in order according to date. If you plan on writing off travel expenses, make a note on your receipt regarding your reason for the write off, making sure to note the doctor’s name and your reason for visiting them.
If you will be paying some expenses with a credit card, consider using one card for all of your medical expenses, which may help with tracking of your spending at the end of the year.