Key Takeaways
- You have to itemize your deductions to claim medical expenses related to diabetes. You can't deduct these expenses if you take the Standard Deduction.
- Your medical expenses have to exceed 7.5% of your Adjusted Gross Income (AGI) to be included in your itemized deductions.
- You can include the purchase price of blood sugar monitoring kits, test strips, insulin and other medications prescribed by your doctor in your medical deduction. You can also deduct the cost of hospital and doctor visits as well as the mileage to and from the doctor.
- If you have health insurance, you can deduct the premiums that you pay, but not the portion the government or your employer pays on your behalf or amounts that you pay with before-tax money.
Care for diabetes
If you, your spouse or a dependent suffers from diabetes, it’s likely that you have more medical expenses than the typical person. Fortunately, the IRS allows you to claim a tax deduction for many of the expenses you incur to diagnose, monitor and treat diabetes. However, you will need to itemize your deductions to claim these expenses, and even then, only a portion of these costs are deductible.
Deductible portion of diabetes expenses
Your total deduction for medical expenses, including all costs that relate to diabetes, are only deductible to the extent the total exceeds 7.5 percent of your Adjusted Gross Income (AGI). Your AGI is not the same as your taxable income; rather it is your total income less specific types of deductions such as deductible student-loan interest and IRA contributions that are separately listed on the first page of your tax return.
To illustrate, suppose your AGI is $50,000. Multiplying this by 7.5 percent gives you $3,750. This means that when you total up all of the medical bills you pay during the year, only the portion that is more than $3,750 can be claimed as an itemized deduction. For example, if your total medical expenses for diabetes and other health-related issues cost $3,800, you can claim a $50 deduction.
Diabetes expenses you can include
There is a wide range of expenses that you can include in your medical deduction including the purchase price of blood sugar monitoring kits, test strips, insulin and other medications prescribed by your doctor to treat your diabetes. Other deductible medical expenses include your payments for hospital and doctor visits, prescription drugs and insulin (but not over-the-counter products), weight-loss programs and most other treatments your doctor recommends. You can even include the expense for each mile you drive to and from the doctor.
TurboTax Tip:
Keep receipts and mileage records throughout the year to calculate your deduction and in case the IRS requests proof.
Health insurance coverage
If you have health insurance, you can deduct the premiums that you pay, but not the portion the government or your employer pays on your behalf or any amount that you pay with before-tax money like from before-tax payroll deductions. Remember though, if your insurance provider covers many of the costs for your diabetes treatments, these amounts aren’t deductible. If you are self-employed, you may be able to deduct all of the premiums you paid for yourself and family as an adjustment to income rather than as an itemized deduction on your personal income tax. This lowers your adjusted gross income and therefore the hurdle amount that your total expenses must exceed.
Reporting medical expenses
Since medical expense deductions are only available if you itemize, you'll need to report them on the Schedule A attachment to your Form 1040. Enter the total amount of your eligible medical expenses and your AGI. The form then requires you to multiply your AGI by 7.5 percent.
To arrive at your final deduction, subtract the result from your total medical expenses. If you think your expenses for the year will be large enough to deduct, keep your receipts and mileage records throughout the year in case the IRS requests proof of your deduction.
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