| April 15th is almost here and if you are | | | | medication or changing dressings, as well as |
| owing tax it may pay to take a second look at | | | | bathing and grooming the patient. These |
| that return to see if you claimed all medical | | | | services can be provided in your home or |
| deductions you are entitled to. Your | | | | another care facility. |
| diligence in keeping track of expenses will | | | | |
| pay off. IRS Publication 502 has a complete | | | | Generally, only the amount spent for nursing |
| listing of all medical costs deductible. | | | | services is a medical expense. If the |
| Following are some of the commonly overlooked | | | | attendant also provides personal and |
| medical deductions. | | | | household services, amounts paid to the |
| | | | attendant must be divided between the time |
| Medical Expenses | | | | spent performing household and personal |
| | | | services and the time spent for nursing |
| The medical expense deduction is limited to | | | | services. However, certain maintenance or |
| the amount by which the annual medical | | | | personal care services provided for qualified |
| expense exceeds 7.5% of your adjusted gross | | | | long-term care can be included in medical |
| income. Included in this category are | | | | expenses. |
| unreimbursement amounts paid for health | | | | |
| insurance, hospital, and nursing care, | | | | You can also include in medical expenses part |
| doctor's and dentists' visits, prescription | | | | of the amount you pay for that attendant's |
| medications, eyeglasses, hearing aids, and | | | | meals. Divide the food expense among the |
| long-term care insurance premiums and | | | | household members to find the cost of the |
| services. | | | | attendant's food. Then divide that cost in |
| | | | the same manner as in the preceding |
| You can also deduct home improvements related | | | | paragraph. If you had to pay additional |
| to medical expenses. These expenses may | | | | amounts for household upkeep because of the |
| include, but are not limited to the | | | | attendant, you can include the extra amounts |
| following: | | | | with your medical expenses. This includes |
| | | | extra rent or utilities you pay because you |
| * Constructing entrance or exit ramps for | | | | moved to a larger apartment to provide space |
| your home. | | | | for the attendant. |
| | | | |
| * Widening doorways at entrances or exits to | | | | Employment taxes. You can include as a |
| your home. | | | | medical expense social security tax, FUTA, |
| | | | Medicare tax, and state employment taxes you |
| * Widening or otherwise modifying hallways | | | | pay for a nurse, attendant, or other person |
| and interior doorways. | | | | who provides medical care. If the attendant |
| | | | also provides personal and household |
| * Installing railings, support bars, or other | | | | services, you can include as a medical |
| modifications to bathrooms. | | | | expense only the amount of employment taxes |
| | | | paid for medical services. |
| * Lowering or modifying kitchen cabinets and | | | | |
| equipment. | | | | Health Insurance Costs for Self-Employed |
| | | | Persons |
| * Moving or modifying electrical outlets and | | | | |
| fixtures. | | | | If you were self-employed and had a net |
| | | | profit for the year, were a general partner |
| * Installing porch lifts and other forms of | | | | (or a limited partner receiving guaranteed |
| lifts (but elevators generally add value to | | | | payments), or received wages from an S |
| the house). | | | | corporation in which you were a more than 2% |
| | | | shareholder (who is treated as a partner), |
| * Modifying fire alarms, smoke detectors, and | | | | you may be able to deduct, as an adjustment |
| other warning systems. | | | | to income, all of the amount paid for medical |
| | | | and qualified long-term care insurance on |
| * Modifying stairways. | | | | behalf of yourself, your spouse, and |
| | | | dependents. |
| * Adding handrails or grab bars anywhere | | | | |
| (whether or not in bathrooms). | | | | The insurance plan must be established under |
| | | | your trade or business, and you cannot take |
| * Modifying hardware on doors. | | | | this deduction to the extent that the amount |
| | | | of the deduction is more than your earned |
| * Modifying areas in front of entrance and | | | | income from that trade or business. |
| exit doorways. | | | | |
| | | | You cannot take this deduction for any month |
| * Grading the ground to provide access to the | | | | in which you were eligible to participate in |
| residence. | | | | any subsidized health plan maintained by your |
| | | | employer or your spouse's employer. This rule |
| Only reasonable costs to accommodate a home | | | | is applied separately to plans that provide |
| to a disabled condition are considered | | | | long-term care insurance and plans that do |
| medical care. Additional costs for personal | | | | not provide long-term care insurance. |
| motives, such as for architectural or | | | | |
| aesthetic reasons, are not medical expenses. | | | | If you qualify to take the deduction, use the |
| | | | Self-Employed Health Insurance Deduction |
| An often overlooked medical deductions is the | | | | Worksheet in the Form 1040 instructions to |
| medicare Part A and Part B premiums | | | | figure the amount you can deduct. But if any |
| voluntarily paid by Social Security | | | | of the following applies, do not use the |
| recipients. Also, if you travel to medical | | | | worksheet. |
| conferences relating to a dependent's chronic | | | | |
| disease, smoking cessation programs or travel | | | | * You had more than one source of income |
| to obtain medical treatment, you may be able | | | | subject to self-employment tax. |
| to deduct the cost of your transportation, as | | | | |
| well as food and lodging. | | | | * You file Form 2555, Foreign Earned |
| | | | Income, or Form 2555-EZ, Foreign Earned |
| Nursing Services | | | | Income Exclusion. |
| | | | |
| You can include in medical expenses wages and | | | | * You are using amounts paid for |
| other amounts you pay for nursing services. | | | | qualified long-term care insurance to figure |
| The services need not be performed by a nurse | | | | the deduction. |
| as long as the services are of a kind | | | | |
| generally performed by a nurse. This includes | | | | Feel free to contact us at if you have |
| services connected with caring for the | | | | questions on any how to maximize your medical |
| patient's condition, such as giving | | | | deductions. |