Tending to Your Taxes (Continued)

What Expenses Are Not Includible?

No changes have been made to the list of items that are not deductible. Following are some of the items that are not deductible:

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

You may not deduct insurance premiums for life insurance, for policies providing for loss of wages because of illness or injury, or policies that pay you a guaranteed amount each week for a sickness. In addition, the deduction for a qualified long–term care insurance policy's premium is limited.

How much can you deduct?
In 2012, 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?
Yourself, spouse, dependent, decedent.

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. If you are reimbursed more than your medical expenses, you may have to include the excess in income.

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Last Modified Date: April 10, 2013

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