Medical Expenses
The IRS allows you to deduct medical expenses, but only if the amount is over 7½% of your adjusted gross income. Additionally, part of your deduction may be subject to the alternative minimum tax. Nevertheless, if you have sizeable medical expenses and pay for your own premiums, including medicare premiums, this can be a great money saver. Even medical commuting miles (24 cents a mile for 2009, 16.5 cents for 2010), tolls, and parking fees can be deducted!
You can use the medical expenses worksheets below to help you track your medical expenses.
Use page 1 to track your mileage. The approach on this page asks for the roundtrip distance to a particular doctor and the number of such trips in the year. Don't forget about tolls and parking fees. Save receipts from the doctor or hospital for each each visit, which will be needed if the IRS asks for supporting documentation.
If you have a device in your car to let you pass the toll gate quickly (such as FasTrak in the Bay Area), the monthly statement from that device is itself a receipt. Otherwise obtain a receipt at the toll gate. If you put money into a parking meter there is no receipt; but you should just note the amount in your records.
Use page 2 to keep track of your insurance payments. Note that medicare part D premiums are deductible.
Use page 3 to keep track of line items. These includes prescription medicines and devices that were not reimbursed by FSA or any other entity. Sometimes, even meals eaten at the hospital qualify.
Official documentation:
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IRS Publication 502 (medical and dental expenses)
© 2008, Pacific Tax Inc