by Myra Watters

Created on: March 09, 2009

Medical and dental expenses that you paid and did not received a reimbursement for during the tax year may be deducted on your income tax return. The expenses are deducted as an itemized expense on Form 1040, Schedule A (line 1 - 4). The allowable deductible amount is limited to the amount of expenses you paid less 7.5% of your Adjusted Gross Income (AGI). The computation of this amount is done directly on the Tax Form. The expenses are deductible in the tax year paid regardless of when the service was provided.

The Internal Revenue Service (IRS) states that, " medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatment affecting any part of function of the body. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes. They also include dental expenses. Medical expenses include fees paid to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and Christian Science practitioners. Also included are payments for hospital services, qualified long-term care services, nursing services, and laboratory fees. Payments for acupuncture treatments or inpatient treatment at a center for alcohol or drug addiction are also deductible medical expenses. " For a list of allowable expenses, see Internal Revenue Service, Publication 17, Chapter 21 (Table 21- 1, Medical and Dental Expenses Checklist.).

You may deduct medical and dental expenses paid by you for yourself, spouse and qualifying dependents including your legally adopted dependents. Legally adopted children are treat as your own child. In order to deduct expenses you paid for your spouse, you must have been married to your spouse at the time of payment or at the time the service was rendered. Your dependents must have been your qualifying dependents at the time of payment or at the time service was rendered.

If you receive reimbursement during the tax year that are more than the medical expenses you paid , you may have to include the excess amount in your income. For example, if your employer paid the entire insurance premium and did not include it in your income, then all of the excess reimbursement is taxable. If you paid part of the premium and your employer paid part, then part of the excess is taxable. Reimbursements received in later years must be reported up to the amount you previously deducted. The amount must be included in income in the year you receive the reimbursement. The recovery amount is report on Form 1040.

Sources:
http://www.irs.gov/publications/p502/in dex.html
http://www.irs.gov/publications/p17/ch21.htm l

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