Consumer Tips

Tending to Your Taxes

Tax time, whether you live on Park Place or on Baltic Avenue, is always a flurry of paperwork, receipts, and forms. Navigating the paperwork can be a daunting task, but keeping good records and being prepared for your filings can help make tax time less taxing.

For a person living with diabetes, it’s important to remember that some medical expenses can be deducted when you file your return. Medical supplies like blood glucose meters, test strips, oral medications, insulin, insulin pumps, and other maintenance supplies can really take a bite out of your budget! Medical expenses, according to the IRS website, are “the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.” Many of your diabetes-related expenses can be deducted on your tax return.

Here are some tips on managing your medical deductions:

What can you include? The following are some medical expenses that are deductible:

• Artificial limb
• Birth control pills
• COBRA continuation health coverage
• Eye surgery
• Laboratory fees
• Medical services (i.e. doctor’s visits)
• Medicines
• Nursing services
• Operations (excluding cosmetic procedures)
• Transplants
• Weight loss programs (if weight loss is necessary to treat a diagnosed condition)
• Wheelchair

The following are some examples of items that are not deductible:

• Baby-sitting services for healthy baby
• Controlled substances
• Cosmetic surgery
• Flexible spending account (FSA)
• Health club dues
• Insurance premiums
• Nonprescription drugs and medicines
• Nutritional supplements
• Weight loss programs (to improve appearance, general health, or sense of well-being)

How much can you deduct? You can deduct only the amount of your medical and dental expenses that is more than 7.5% of your adjusted gross income (found on Form 1040, line 38).

For example, if your adjusted gross income is $40,000, 7.5% of that amount would be $3,000. If you paid medical expenses of only $2,500, you cannot deduct any medical because your amount paid does not exceed 7.5% of your gross adjusted income. On the other hand, if you paid in medical expenses of $4,300, you can only deduct $1,300.

Who can you include? You can include medical expenses you paid for yourself, your spouse, or any dependents.

How do you treat reimbursements? You can only include in medical expenses those amounts paid during the tax year for which you received no insurance or other reimbursement. For insurance reimbursements, you must reduce your total medical expenses for the year by all reimbursements for medical expenses that you receive from insurance or other sources during the year. This includes all payments from Medicare.


Adapted and excerpted from the Internal Revenue Service website at www.irs.gov


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