Your client figures their medial expense deductions on Schedule A (Form 1040). They must first reduce their total medical expenses by all reimbursements they have received from insurance or other sources, including Medicare. Unfortunately, while almost any medical expense qualifies for the deduction, it is difficult to actually take a deduction on their tax return. To qualify for this deduction, their medical expenses must total more than 7.5% of their adjusted gross income for the tax year. For example, a person with an adjusted gross income of $40,000 must have more than $3,000 in total medical expenses in order to utilize this deduction. They can, however, include medical expenses they pay for themselves, their spouse, dependents and adopted children.
Deducted medical expenses include payments for treatment, cure, diagnosis and treatment of diseases related to any part or function of the body as well as costs incurred for alleviation or prevention of mental illness. Deductions cannot be taken for expenses incurred for purely cosmetic procedures or overall general health benefits. Following is a list of commonly overlooked medical and dental related expenses.