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What Medical Expenses are Tax Deductible for Seniors?

Tax season is upon us again. While you may know the exact filing requirements for your personal taxes, what about how to file the taxes of an aging parent or loved one? If you provide home care for a senior loved one, are there medical and dental expenses that are tax deductible?

What Expenses Can Seniors Deduct?

Studies show that medical and dental expenses are some of the most costly for seniors, with as much of 30% of a senior’s income going toward health care premiums, prescription drugs and other expenses related to health care. Although many of these medical expenses are tax deductible, only the amount of medical/dental expenses that is more than 7.5% of the senior’s adjusted gross income can be deducted.

For example, if the adjusted gross income is $160,000 and there are receipts for medical/dental expenses totaling to $20,000, only $8,000 can be deducted. This is the amount that medical/dental expenses exceed 7.5% of the AGI. 7.5% of $160,000 is $12,000, and $20,000-$12,000 is $8,000. Certain out-of-pocket expenses are deductible for seniors if they itemize their deductions in the Schedule A (1040 form) section of their tax return.

What Can be Included in Deductions:

  • Medical and hospital insurance premiums
  • Medical service fees (from doctors, dentists, surgeons, specialists, etc.)
  • Wages for live-in home care if senior meets requirements for assistance
  • Fees paid to retirement homes designated for medical care
  • Capital expenses for equipment or improvements to the home needed for medical care
  • Certain weight-loss expenses for obesity
  • Hospital service fees (laboratory work, therapy, nursing services, etc.)
  • Meals and lodging provided by a hospital during medical treatment
  • Long-term, qualified care contracts
  • Diagnostic devices, bandages and oxygen equipment
  • Eye surgery-to correct the function of the eye
  • Guide dogs or other animals aiding the blind, deaf, and disabled
  • Prescription medicines and insulin
  • Expenses of an organ donor
  • Psychiatric and psychological treatment
  • Special items (dentures, eyeglasses, hearing aids, crutches, wheelchairs, etc.)
  • Programs to help quit smoking

What Cannot be Included in Deductions:

  • Medicine bought without a prescription
  • Prescription drugs bought in, or ordered or shipped from another country
  • Surgery for purely cosmetic reasons
  • Toothpaste, toiletries, cosmetics
  • Weight-loss expenses not for the treatment of obesity or other disease
  • Funeral, burial, or cremation expenses
  • Contributions to Archer Medical Savings Accounts (MSAs)
  • Flexible spending account reimbursements for medical expenses (if contributions were on a pretax basis)
  • Health savings account for medical expenses
  • Life insurance or income protection policies
  • Expenses for general health (health club dues, household help, social activities such as dancing/swimming lessons, trips for general health improvement)

Make sure you deduct the maximum amount from your loved one’s taxes and put the savings toward helping to ensure safety, comfort and quality of life moving forward. To learn more about home care services in your area, call 310-504-0506 and speak with a friendly Care Manager from Home Care Assistance of Redondo Beach, a premier home care agency serving Southern California’s South Bay.