Medical Expenses

Medical expenses that you pay during the tax year for yourself, your spouse, and your dependents are deductible to the extent the total exceeds 7.5% of your adjusted gross income.  This limitation can be hard to reach if you claim only medical insurance premiums and the co-pay on your kid's doctors' visits.  Keep these potential deductions in mind as you tally up this year's medical expenses:

  • For your home: capital expenditures for home improvements and additions (such as swimming pools, saunas, Jacuzzis, elevators) that are added primarily for medical care qualify for the medical expense deduction to the extent that the cost exceeds any increase in the value of your property due to the improvement.


  • For your children: orthodontia; remedial reading and language training classes; lead paint removal.


  • For you and your spouse: Lamaze or other childbirth preparation classes (mother only); contacts and eyeglasses; prescription contraceptives & permanent sterilization; health club dues (if prescribed by a physician for medical purposes); massages (if prescribed by a physician); mileage for trips to medical appointments.


  • For your aging parents: If you or your spouse has a parent that qualifies as a dependent, you can deduct: hearing aids; domestic aid (provided by a nurse); prepaid lifetime medical care paid to a retirement home; special mattresses (prescribed by a physician); certain nursing home costs.


To maximize your deduction, try to bunch your medical expensed into one year to exceed the 7.5% limit.  For example, schedule costly elective medical and dental treatments to be performed and billed in the same tax year.

Taxes Paid

Many of the taxes that you pay such as real estate taxes for your home, state and local taxes, and auto registration fees are deductible as itemized deductions on your return.  Do not forget these:

  • Property taxes paid on boats, motor homes, trailers, and other personal property.


  • Real estate taxes paid on investment property and vacation homes.


  • Real estate taxes paid through escrow in association with the purchase or sale of your residence or investment property.


  • Employee contributions to a state disability fund.


  • Foreign income taxes paid not taken as a credit.



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