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Health Insurance Basics

10 Tips for Deducting Your Health Care Expenses

December 09, 2016

Tax time is here and the health care expenses you’ve paid may help lower your tax bill, or even get you money back. Here are Anthem's top 10 tips for making the most of health care deductions.

Tip No. 1: Open an HSA.

Health Savings Accounts are tax-free ways to save money for medical expenses. Expenses you pay for using HSA money aren’t tax deductible, but that’s because you’ve already gotten tax benefits from the account. This can be a good way to save for your future while enjoying tax benefits today.

Tip No. 2: Plan your spending.

The best way to maximize tax benefits for your health and medical spending is to plan ahead. Remember you only get deductions above 10 percent of your income. This means that if you can group expenses into one year instead of spreading them out, you’ll reap tax rewards.

Tip No. 3: See if you can deduct your premiums.

If you pay for your own insurance, you get tax benefits. Sometimes you get this benefit by paying with pretax money, but if you don’t, you can deduct your premiums.

Tip No. 4: Check approved medical expenses.

The IRS’ Publication 502 lists all the eligible medical deductions you can take, and you’ll be amazed at how many there are. It’s not just tests and treatments; everything from air conditioners to weight loss might be eligible – as long as it’s doctor recommended.

6: Include the expenses of everyone listed on your tax return.

Expenses incurred by spouses and dependents are also tax deductible. Even expenses of a non-dependent – a parent, for example –may be tax deductible.

Tip No. 5: Consider vision and dental.

Your dental and vision insurance may be tax deductible, and the expenses associated with them almost certainly will be. Consider these tax benefits when deciding whether to invest in these optional insurance programs.

Tip No. 6: Include the expenses of everyone listed on your tax return.

Expenses incurred by spouses and dependents are also tax deductible. Even expenses of a non-dependent – a parent, for example –may be tax deductible.

Tip No. 7: Did you need to alter your house?

If you have certain medical conditions, altering your home might improve your quality of life. In these cases, as long as a doctor has recognized the benefit, those projects are largely tax deductible. This could include installing air conditioners or disability ramps.

Tip No. 8: Consider travel costs.

Gas money, hotel stays and other travel expenses associated with health care are tax deductible.

Tip No. 9: Always itemize.

If you don’t do a Schedule A itemization, you won’t get your deductions. Itemizing can help you keep track of what you’ve deducted. Over the course of the year, keep track of your deductible expenses and save your receipts.

Tip No. 10: 10 is the magic number.

You can deduct medical expenses above 10 percent of your income. This means that if you make $50,000 a year, you can deduct expenses above $5,000.