Internal Revenue Code Section 213(a)(1) says you can deduct as medical expenses on Schedule A amounts paid for the “diagnosis, cure, mitigation, treatment or prevention of disease or for the purpose of affecting any structure or function of the body.”
But medical expenses are deductible only to the extent that the total amount of allowable costs exceeds 7.5% of your Adjusted Gross Income (AGI). If your AGI is $70,000, the first $5,250 of medical expenses are excluded — the first $5,250 is not deductible. Under this example, if the total of your allowable medical expenses for the year is $5,000 you get no deduction. If your medical expenses for the year total $6,000 you get a tax deduction of $750 ($6,000 less $5,250).
If you are a victim of the dreaded Alternative Minimum Tax (AMT), medical expenses are only deductible to the extent they exceed 10% of AGI.
Medical deductions are not limited to costs involved for physical disorders, but include expenses relating to psychological and emotional disorders as well.
Neither the medical practitioner prescribing the treatment nor the method of treatment prescribed has to be approved or sanctioned by the American Medical Association to claim a tax deduction, as long as the practitioner and treatment are valid within the patient’s religious or cultural context. Deductions for treatment by Christian Science Practitioners and Native American medicine men have been upheld by the IRS and the courts.
New Jersey tax pro Robert D. Flach has been preparing 1040s for individuals since 1972.
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