Healthcare costs are soaring, but the IRS does allow you to write off some of these medical expenses on your taxes. Designed to help taxpayers burdened with the expenses associated with emergency and routine care, medical deductions are still subject to eligibility requirements or rules. A wide range of unreimbursed treatments, costs and therapies may qualify for deduction. But, in true IRS fashion, the rules for claiming medical bills are very specific, and the list of qualifying tax deductible expenses is quite extensive.
The IRS maintains very strict rules regarding deductions for medical expenses. According to current guidelines, an individual can only deduct medical bills on the tax return for the year in which the bills were paid. Note that there is a clear distinction here between the year the bills were paid and the year treatment was provided
Can I Claim Medical Bills from Previous Years?
While the rules for claiming medical expenses can be tricky, the IRS is very straightforward in regards to when you’re able to claim medical expenses. You may deduct your medical bills only for the year in which the treatments or services were paid for, and not the year in which they were rendered. For example, if you scheduled and paid for knee surgery for yourself in 2017, but did not undergo the actual procedure until 2018, then you can deduct any associated medical expenses only for the 2017 tax year.
Only taxpayers who itemize deductions on their tax returns are eligible to claim medical expenses on their taxes, so you cannot write off these costs if you claim standard deductions. If your total itemized medical expenses – plus other qualifying deductions – are greater than the sum of your standard deduction and any exemptions, then you should itemize. It is best to run both scenarios to see which provides you with the greater deduction. Sometimes you may discover that your standard deduction is a better choice than itemizing. If you’ve decided to itemize your medical expenses, use Schedule A of Form 1040.
Claiming Medical Deduction for Spouse or Dependents
This rule is different when you’re paying for the costs of medical treatment for a spouse or dependents. Unlike when claiming your own medical deductions, deductions taken for unreimbursed medical expenses made for another person may be taken either when the service was provided, or when the bill was paid.
Not only are you able to claim a prior year’s medical bills for yourself, but any bills you paid for your spouse or qualifying dependent are eligible as well – provided the services are acceptable medical deductions.
Tax Laws for Medical Bill Deduction 2018
The medical expenses deduction threshold has been extended to 2018. Taxpayers can claim eligible medical or dental expenses greater than 7.5 percent of their adjusted gross income, or AGI, through 2018. For example, if your total AGI is $35,000, you can write off only qualifying medical expenses that exceed $2,625, or 7.5 percent of your AGI. For the 2019 tax year, this threshold is slated to rise to 10 percent of AGI for medical deductions.
Medical Bill Deduction 2017
Lawmakers have passed a bill extending the medical expenses deduction threshold, which was scheduled to expire after the 2016 tax year, for 2017.
- IRS: Publication 502 (2017), Medical and Dental Expenses
- CNBC: GOP tax bill expands medical expense deduction for two years
- Congress.gov. "H.R.3301 – Taxpayer Certainty and Disaster Tax Relief Act of 2019." Accessed Jan. 4, 2020.
- Internal Revenue Service. "IRS Provides Tax Inflation Adjustments for Tax Year 2020." Accessed Jan. 4, 2020.
- Internal Revenue Service. "Itemize or Choose the Standard Deduction." Accessed Jan. 4, 2020.
- Internal Revenue Service. "Schedule A Itemized Deductions." Accessed Jan. 6, 2020.
- Internal Revenue Service. "2019 Instructions for Schedule A (2019)." Accessed Jan. 4, 2019.
- Internal Revenue Service. "Publication 502 (2018) Medical and Dental Expenses." Accessed Jan. 6, 2020.
- Internal Revenue Service. "IRS Issues Standard Mileage Rates for 2020." Accessed Jan. 4, 2020.
Tara Thomas is a Los Angeles-based writer and avid world traveler. Her articles appear in various online publications, including Sapling, PocketSense, Zacks, Livestrong, Modern Mom and SF Gate. Thomas has a Bachelor of Science in marine biology from California State University, Long Beach and spent 10 years as a mortgage consultant.