Even the cheapest medical care is expensive. Healthcare costs are getting higher and we’re not getting younger. Tracking your medical expenses can be worth the time and effort’”especially if they become tax deductible.

Tax Tidbit #2:

Make sure you take the deduction for your medical expenses, if you qualify.

The IRS allows you to deduct a portion of your medical expenses. The amount that exceeds 7.5% of your adjusted gross income (AGI) can be deducted. Report the deduction on Schedule A, as an attachment to Form 1040.

1. Calculate your AGI by completing the first page of Form 1040. The figure you have at the bottom of the page is your AGI. Simply stated, It is your income less certain allowable deductions.

2. Multiply your AGI by 0.075 to calculate 7.5%. For example, if your AGi is $60,000 your medical expenses will need to be more than $4,500 to take this deduction.

3. Get out those receipts and tally your medical expenses. If they are greater than your 7.5% calculation, include them! To continue the example above, if your medical expenses were $6,000 you could include $1,500 on your itemized deductions.

Include cost you pay for out of pocket like doctor appointments, equipment, supplies and diagnostic devices such as diabetes testing kits. You can also include insurance premiums, co-payments, and the amount paid for long-term care. If you paid medical expenses for a spouse or dependent, include those figures too.

Don’t short change yourself. Include all applicable expenses. There is even a way to include transportation to and from your medical appointments. Here’s a brief sample.

INCLUDED
Acupuncture
Contact lenses
Braille books and magazines
Fees to a Christian Scientist practitioner for medical care
Fertility enhancement

Unfortunately, we cannot deduct all the expenses we may consider medical. For example, don’t try to slip these by the IRS.

NOT INCLUDED
Vitamins
Vacations for general health and wellness
Baby sitting childcare, and nursing services for a normal, healthy baby
Cosmetic surgery
Health club dues
Dancing and swimming lessons

Remember, the IRS will hold you responsible for knowing which expenses can and cannot be included. For to the comprehensive list refer to IRS publication 502. If you can’t locate the answer to your question, contact your trusted tax professional.