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Category: Finding Deductions

Please explain deductions that are available related to Medical Expenses.

Medical and dental expenses, such as doctor visits, health insurance, glasses, etc.:

Generally, you are allowed a deduction for most of the medical expenses that you paid during the tax year. However, you cannot include any part of the expenses that were paid by an insurance company or other source. You can generally include the qualifying expenses that you paid for yourself, your spouse, and all dependents that are being claimed on your return.

Common expenses include:

  • Medical and dental insurance
  • Amounts paid to doctors and dentists
  • Prescriptions
  • Medical aids such as eyeglasses, hearing aids, crutches, and wheelchairs
  • If you used your own car, you can even claim certain vehicle expenses that you paid to go to and from the place you received the care.

    For additional information, click here.

    Health Savings Account:

    A Health Savings Account (HSA) is a tax-exempt trust or custodial account that you can set up to help pay for medical expenses that you may incur throughout the year.

    Any contributions that you make to an HSA during the year are generally deductible. If you made contributions to an HSA, you should receive a Form 5498-SA listing your contribution information. You will know it is for an HSA because the HSA box will be checked in box 6.

    The IRS also requires that you report any distributions that you received from your HSA during the year. If you withdrew money from your HSA, you should receive a Form 1099-SA with the amount of your withdrawals. You will know it is for an HSA because the HSA box will be checked in box 5.

    Medical Savings Account:

    A Medical Savings Account (MSA) is another type of tax-exempt account that you can set up to help pay medical expenses that you may incur throughout the year. It is similar to an HSA.

    Any contributions that you make to an MSA during the year are generally deductible. If you made contributions to an MSA, you should receive a Form 5498-SA listing your contribution information. You will know it is for an MSA because the Archer MSA box or the MA MSA box will be checked in Box 6.

    The IRS also requires that you report any distributions that you received from your MSA during the year. If you withdrew money from your MSA, you should receive a Form 1099-SA with the amount of your withdrawals. You will know it is for an MSA because the Archer MSA box or the MA MSA box will be checked in box 5.

    Health Insurance for Self-Employed Individuals:

    If you were self-employed, you may be able to deduct any amounts that you paid to provide health insurance for yourself, your spouse, and/or your dependents.

    To qualify for the deduction:

  • Your business must have had a net profit for the year and
  • The insurance plan must be established under your business.