Medical and Health
Premium Tax Credit and Health Insurance Coverage Penalty
You must have health insurance coverage for yourself and your family members or pay a penalty when you file your tax return. Certain individuals qualify for an exemption from the requirement for health insurance coverage, such as members of Native American tribes, certain religious sects, or those suffering from financial hardships. Many individuals who purchase health insurance through the Health Insurance Marketplace within their state may qualify to have advance payments of their Premium Tax Credit sent to their insurance company to offset their premium cost. This credit is available throughout the year as a direct payment to the insurance company to help reduce the actual cost of the insurance. Taxpayers who do not have insurance coverage from an employer or a government plan such as Medicaid, Medicare or TRICARE must file a tax return to either claim an exemption from the penalty, pay the penalty, or claim the tax credit and reconcile any advanced payment of the credit.
Health Savings Account - Deduction
If you made contributions to a health savings account (HSA), you may be able to take a deduction as an adjustment to income. You may establish and contribute to an HSA if you are covered by a high deductible health plan. Amounts contributed to an HSA belong to you and are completely portable. Every year the money not spent stays in the account and gains interest tax-free, just like an IRA. Unused amounts remain available for later years (unlike amounts in Flexible Spending Arrangements (FSAs) that are forfeited if not used by the end of the year).
Itemized Deduction - Medical Expenses
If you itemize your deductions, you may be able to deduct medical expenses. You can deduct the amount that is more than 7.5% of your adjusted gross income (AGI). You are allowed to deduct unreimbursed medical and dental expenses for yourself and your family members.
Itemized Deductions- Medical Expenses - Long-Term Care
The cost of qualified long-term care services can generally be included as medical expenses. These costs include a part of the premiums for qualified long-term care insurance. Long-term care insurance premiums covering these qualified services are deductible as medical expenses subject to certain limitations.
Itemized Deductions - Medical Expenses - Maximize your Deductions
If you file Form 1040 and itemize your deductions, you may deduct medical expenses that are over 7.5% of your adjusted gross income. Careful tax planning may allow you to plan ahead so that you could take more medical deductions during one tax year instead of spreading them over two. For example, in a year that you already have substantial medical expenses, schedule and pay for your routine doctor or dentist appointments by December 31 instead of early next year.
Itemized Deductions - Medical Expenses - Overlooked Deductions
Do not overlook any medical deductions for which you may qualify. Hearing aids, eyeglasses, contact lenses, hospital fees for nursing, physical therapy, lab tests and x-rays are all deductible. The 2017 mileage rate to and from a doctor or dentist's office is 17 cents per mile. Bus and taxi costs incurred for traveling to and from medical appointments are also deductible.
Itemized Deductions - Medical Expenses - Weight Control Treatment
The IRS recognizes obesity as a medical disease. If you participate in a weight loss program because your physician diagnoses obesity, you may be able to deduct it as a medical expense on Schedule A, Itemized Deductions. General rules for deducting medical expenses apply.