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Amending A Tax Return

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Amending A Tax Return

Amending a tax return 21. Amending a tax return   Medical and Dental Expenses Table of Contents What's New Introduction Useful Items - You may want to see: What Are Medical Expenses? What Expenses Can You Include This Year?Community property states. Amending a tax return How Much of the Expenses Can You Deduct? Whose Medical Expenses Can You Include?Yourself Spouse Dependent Decedent What Medical Expenses Are Includible?Insurance Premiums Meals and Lodging Transportation Disabled Dependent Care Expenses How Do You Treat Reimbursements?Insurance Reimbursement Damages for Personal Injuries How Do You Figure and Report the Deduction on Your Tax Return?What Tax Form Do You Use? Impairment-Related Work Expenses Health Insurance Costs for Self-Employed Persons What's New Medical and dental expenses. Amending a tax return  Beginning January 1, 2013, you can deduct only the part of your medical and dental expenses that exceed 10% of your adjusted gross income (AGI) (7. Amending a tax return 5% if either you or your spouse is age 65 or older). Amending a tax return Standard mileage rate. Amending a tax return  The standard mileage rate allowed for operating expenses for a car when you use it for medical reasons is 24 cents per mile. Amending a tax return See Transportation under What Medical Expenses Are Includible. Amending a tax return Introduction This chapter will help you determine the following. Amending a tax return What medical expenses are. Amending a tax return What expenses you can include this year. Amending a tax return How much of the expenses you can deduct. Amending a tax return Whose medical expenses you can include. Amending a tax return What medical expenses are includible. Amending a tax return How to treat reimbursements. Amending a tax return How to report the deduction on your tax return. Amending a tax return How to report impairment-related work expenses. Amending a tax return How to report health insurance costs if you are self-employed. Amending a tax return Useful Items - You may want to see: Publications 502 Medical and Dental Expenses 969 Health Savings Accounts and Other Tax-Favored Health Plans Form (and Instructions) Schedule A (Form 1040) Itemized Deductions What Are Medical Expenses? Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. Amending a tax return These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. Amending a tax return They include the costs of equipment, supplies, and diagnostic devices needed for these purposes. Amending a tax return Medical care expenses must be primarily to alleviate or prevent a physical or mental defect or illness. Amending a tax return They do not include expenses that are merely beneficial to general health, such as vitamins or a vacation. Amending a tax return Medical expenses include the premiums you pay for insurance that covers the expenses of medical care, and the amounts you pay for transportation to get medical care. Amending a tax return Medical expenses also include amounts paid for qualified long-term care services and limited amounts paid for any qualified long-term care insurance contract. Amending a tax return What Expenses Can You Include This Year? You can include only the medical and dental expenses you paid this year, regardless of when the services were provided. Amending a tax return If you pay medical expenses by check, the day you mail or deliver the check generally is the date of payment. Amending a tax return If you use a “pay-by-phone” or “online” account to pay your medical expenses, the date reported on the statement of the financial institution showing when payment was made is the date of payment. Amending a tax return If you use a credit card, include medical expenses you charge to your credit card in the year the charge is made, not when you actually pay the amount charged. Amending a tax return Separate returns. Amending a tax return   If you and your spouse live in a noncommunity property state and file separate returns, each of you can include only the medical expenses each actually paid. Amending a tax return Any medical expenses paid out of a joint checking account in which you and your spouse have the same interest are considered to have been paid equally by each of you, unless you can show otherwise. Amending a tax return Community property states. Amending a tax return   If you and your spouse live in a community property state and file separate returns, or are registered domestic partners in Nevada, Washington, or California, any medical expenses paid out of community funds are divided equally. Amending a tax return Each of you should include half the expenses. Amending a tax return If medical expenses are paid out of the separate funds of one individual, only the individual who paid the medical expenses can include them. Amending a tax return If you live in a community property state, and are not filing a joint return, see Publication 555, Community Property. Amending a tax return How Much of the Expenses Can You Deduct? Generally, you can deduct on Schedule A (Form 1040) only the amount of your medical and dental expenses that is more than 10% of your AGI (7. Amending a tax return 5% of your AGI if either you or your spouse is age 65 or older)(Form 1040, line 38). Amending a tax return Example. Amending a tax return You are unmarried and under age 65 and your AGI is $40,000, 10% of which is $4,000. Amending a tax return You paid medical expenses of $2,500. Amending a tax return You cannot deduct any of your medical expenses because they are not more than 10% of your AGI. Amending a tax return Whose Medical Expenses Can You Include? You can generally include medical expenses you pay for yourself, as well as those you pay for someone who was your spouse or your dependent either when the services were provided or when you paid for them. Amending a tax return There are different rules for decedents and for individuals who are the subject of multiple support agreements. Amending a tax return See Support claimed under a multiple support agreement , later. Amending a tax return Yourself You can include medical expenses you paid for yourself. Amending a tax return Spouse You can include medical expenses you paid for your spouse. Amending a tax return To include these expenses, you must have been married either at the time your spouse received the medical services or at the time you paid the medical expenses. Amending a tax return Example 1. Amending a tax return Mary received medical treatment before she married Bill. Amending a tax return Bill paid for the treatment after they married. Amending a tax return Bill can include these expenses in figuring his medical expense deduction even if Bill and Mary file separate returns. Amending a tax return If Mary had paid the expenses, Bill could not include Mary's expenses in his separate return. Amending a tax return Mary would include the amounts she paid during the year in her separate return. Amending a tax return If they filed a joint return, the medical expenses both paid during the year would be used to figure their medical expense deduction. Amending a tax return Example 2. Amending a tax return This year, John paid medical expenses for his wife Louise, who died last year. Amending a tax return John married Belle this year and they file a joint return. Amending a tax return Because John was married to Louise when she received the medical services, he can include those expenses in figuring his medical expense deduction for this year. Amending a tax return Dependent You can include medical expenses you paid for your dependent. Amending a tax return For you to include these expenses, the person must have been your dependent either at the time the medical services were provided or at the time you paid the expenses. Amending a tax return A person generally qualifies as your dependent for purposes of the medical expense deduction if both of the following requirements are met. Amending a tax return The person was a qualifying child (defined later) or a qualifying relative (defined later), and The person was a U. Amending a tax return S. Amending a tax return citizen or national, or a resident of the United States, Canada, or Mexico. Amending a tax return If your qualifying child was adopted, see Exception for adopted child , next. Amending a tax return You can include medical expenses you paid for an individual that would have been your dependent except that: He or she received gross income of $3,900 or more in 2013, He or she filed a joint return for 2013, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. Amending a tax return Exception for adopted child. Amending a tax return   If you are a U. Amending a tax return S. Amending a tax return citizen or U. Amending a tax return S. Amending a tax return national and your adopted child lived with you as a member of your household for 2013, that child does not have to be a U. Amending a tax return S. Amending a tax return citizen or national or a resident of the United States, Canada, or Mexico. Amending a tax return Qualifying Child A qualifying child is a child who: Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew), Was: Under age 19 at the end of 2013 and younger than you (or your spouse, if filing jointly), Under age 24 at the end of 2013, a full-time student, and younger than you (or your spouse, if filing jointly), or Any age and permanently and totally disabled, Lived with you for more than half of 2013, Did not provide over half of his or her own support for 2013, and Did not file a joint return, or, if he or she did, it was only to claim a refund. Amending a tax return Adopted child. Amending a tax return   A legally adopted child is treated as your own child. Amending a tax return This includes a child lawfully placed with you for legal adoption. Amending a tax return   You can include medical expenses that you paid for a child before adoption if the child qualified as your dependent when the medical services were provided or when the expenses were paid. Amending a tax return   If you pay back an adoption agency or other persons for medical expenses they paid under an agreement with you, you are treated as having paid those expenses provided you clearly substantiate that the payment is directly attributable to the medical care of the child. Amending a tax return   But if you pay the agency or other person for medical care that was provided and paid for before adoption negotiations began, you cannot include them as medical expenses. Amending a tax return    You may be able to take an adoption credit for other expenses related to an adoption. Amending a tax return See the Instructions for Form 8839, Qualified Adoption Expenses, for more information. Amending a tax return Child of divorced or separated parents. Amending a tax return   For purposes of the medical and dental expenses deduction, a child of divorced or separated parents can be treated as a dependent of both parents. Amending a tax return Each parent can include the medical expenses he or she pays for the child, even if the other parent claims the child's dependency exemption, if: The child is in the custody of one or both parents for more than half the year, The child receives over half of his or her support during the year from his or her parents, and The child's parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Live apart at all times during the last 6 months of the year. Amending a tax return This does not apply if the child's exemption is being claimed under a multiple support agreement (discussed later). Amending a tax return Qualifying Relative A qualifying relative is a person: Who is your: Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild), Brother, sister, half brother, half sister, or a son or daughter of either of them, Father, mother, or an ancestor or sibling of either of them (for example, your grandmother, grandfather, aunt, or uncle), Stepbrother, stepsister, stepfather, stepmother, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law, or Any other person (other than your spouse) who lived with you all year as a member of your household if your relationship did not violate local law, Who was not a qualifying child (see Qualifying Child earlier) of any other person for 2013, and For whom you provided over half of the support in 2013. Amending a tax return But see Child of divorced or separated parents , earlier, and Support claimed under a multiple support agreement, next. Amending a tax return Support claimed under a multiple support agreement. Amending a tax return   If you are considered to have provided more than half of a qualifying relative's support under a multiple support agreement, you can include medical expenses you pay for that person. Amending a tax return A multiple support agreement is used when two or more people provide more than half of a person's support, but no one alone provides more than half. Amending a tax return   Any medical expenses paid by others who joined you in the agreement cannot be included as medical expenses by anyone. Amending a tax return However, you can include the entire unreimbursed amount you paid for medical expenses. Amending a tax return Example. Amending a tax return You and your three brothers each provide one-fourth of your mother's total support. Amending a tax return Under a multiple support agreement, you treat your mother as your dependent. Amending a tax return You paid all of her medical expenses. Amending a tax return Your brothers reimbursed you for three-fourths of these expenses. Amending a tax return In figuring your medical expense deduction, you can include only one-fourth of your mother's medical expenses. Amending a tax return Your brothers cannot include any part of the expenses. Amending a tax return However, if you and your brothers share the nonmedical support items and you separately pay all of your mother's medical expenses, you can include the unreimbursed amount you paid for her medical expenses in your medical expenses. Amending a tax return Decedent Medical expenses paid before death by the decedent are included in figuring any deduction for medical and dental expenses on the decedent's final income tax return. Amending a tax return This includes expenses for the decedent's spouse and dependents as well as for the decedent. Amending a tax return The survivor or personal representative of a decedent can choose to treat certain expenses paid by the decedent's estate for the decedent's medical care as paid by the decedent at the time the medical services were provided. Amending a tax return The expenses must be paid within the 1-year period beginning with the day after the date of death. Amending a tax return If you are the survivor or personal representative making this choice, you must attach a statement to the decedent's Form 1040 (or the decedent's amended return, Form 1040X) saying that the expenses have not been and will not be claimed on the estate tax return. Amending a tax return Qualified medical expenses paid before death by the decedent are not deductible if paid with a tax-free distribution from any Archer MSA, Medicare Advantage MSA, or health savings account. Amending a tax return Amended returns and claims for refund are discussed in chapter 1. Amending a tax return What if you pay medical expenses of a deceased spouse or dependent?   If you paid medical expenses for your deceased spouse or dependent, include them as medical expenses on your Form 1040 in the year paid, whether they are paid before or after the decedent's death. Amending a tax return The expenses can be included if the person was your spouse or dependent either at the time the medical services were provided or at the time you paid the expenses. Amending a tax return What Medical Expenses Are Includible? Use Table 21-1, later, as a guide to determine which medical and dental expenses you can include on Schedule A (Form 1040). Amending a tax return This table does not include all possible medical expenses. Amending a tax return To determine if an expense not listed can be included in figuring your medical expense deduction, see What Are Medical Expenses , earlier. Amending a tax return Insurance Premiums You can include in medical expenses insurance premiums you pay for policies that cover medical care. Amending a tax return Medical care policies can provide payment for treatment that includes: Hospitalization, surgical services, X-rays, Prescription drugs and insulin, Dental care, Replacement of lost or damaged contact lenses, and Long-term care (subject to additional limitations). Amending a tax return See Qualified Long-Term Care Insurance Contracts in Publication 502. Amending a tax return If you have a policy that provides payments for other than medical care, you can include the premiums for the medical care part of the policy if the charge for the medical part is reasonable. Amending a tax return The cost of the medical part must be separately stated in the insurance contract or given to you in a separate statement. Amending a tax return Note. Amending a tax return When figuring the amount of insurance premiums you can include in medical expenses on Schedule A, do not include any health coverage tax credit advance payments shown in box 1 of Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments. Amending a tax return Also, do not include insurance premiums attributable to a nondependent child under age 27 if your premiums increased as a result of adding this child to your policy. Amending a tax return Employer-sponsored health insurance plan. Amending a tax return   Do not include in your medical and dental expenses any insurance premiums paid by an employer-sponsored health insurance plan unless the premiums are included in box 1 of your Form W-2. Amending a tax return Also, do not include any other medical and dental expenses paid by the plan unless the amount paid is included in box 1 of your Form W-2. Amending a tax return Example. Amending a tax return You are a federal employee participating in the premium conversion plan of the Federal Employee Health Benefits (FEHB) program. Amending a tax return Your share of the FEHB premium is paid by making a pre-tax reduction in your salary. Amending a tax return Because you are an employee whose insurance premiums are paid with money that is never included in your gross income, you cannot deduct the premiums paid with that money. Amending a tax return Long-term care services. Amending a tax return   Contributions made by your employer to provide coverage for qualified long-term care services under a flexible spending or similar arrangement must be included in your income. Amending a tax return This amount will be reported as wages in box 1 of your Form W-2. Amending a tax return Health reimbursement arrangement (HRA). Amending a tax return   If you have medical expenses that are reimbursed by a health reimbursement arrangement, you cannot include those expenses in your medical expenses. Amending a tax return This is because an HRA is funded solely by the employer. Amending a tax return Retired public safety officers. Amending a tax return   If you are a retired public safety officer, do not include as medical expenses any health or long-term care premiums that you elected to have paid with tax-free distributions from your retirement plan. Amending a tax return This applies only to distributions that would otherwise be included in income. Amending a tax return Medicare A. Amending a tax return   If you are covered under social security (or if you are a government employee who paid Medicare tax), you are enrolled in Medicare A. Amending a tax return The payroll tax paid for Medicare A is not a medical expense. Amending a tax return   If you are not covered under social security (or were not a government employee who paid Medicare tax), you can voluntarily enroll in Medicare A. Amending a tax return In this situation you can include the premiums you paid for Medicare A as a medical expense. Amending a tax return Medicare B. Amending a tax return   Medicare B is supplemental medical insurance. Amending a tax return Premiums you pay for Medicare B are a medical expense. Amending a tax return Check the information you received from the Social Security Administration to find out your premium. Amending a tax return Medicare D. Amending a tax return    Medicare D is a voluntary prescription drug insurance program for persons with Medicare A or B. Amending a tax return You can include as a medical expense premiums you pay for Medicare D. Amending a tax return Prepaid insurance premiums. Amending a tax return   Premiums you pay before you are age 65 for insurance for medical care for yourself, your spouse, or your dependents after you reach age 65 are medical care expenses in the year paid if they are: Payable in equal yearly installments, or more often, and Payable for at least 10 years, or until you reach age 65 (but not for less than 5 years). Amending a tax return Unused sick leave used to pay premiums. Amending a tax return   You must include in gross income cash payments you receive at the time of retirement for unused sick leave. Amending a tax return You also must include in gross income the value of unused sick leave that, at your option, your employer applies to the cost of your continuing participation in your employer's health plan after you retire. Amending a tax return You can include this cost of continuing participation in the health plan as a medical expense. Amending a tax return   If you participate in a health plan where your employer automatically applies the value of unused sick leave to the cost of your continuing participation in the health plan (and you do not have the option to receive cash), do not include the value of the unused sick leave in gross income. Amending a tax return You cannot include this cost of continuing participation in that health plan as a medical expense. Amending a tax return Table 21-1. Amending a tax return Medical and Dental Expenses Checklist. Amending a tax return See Publication 502 for more information about these and other expenses. Amending a tax return You can include: You cannot include: Bandages Birth control pills prescribed by your doctor Body scan Braille books Breast pump and supplies Capital expenses for equipment or improvements to your home needed for medical care (see the worksheet in Publication 502) Diagnostic devices Expenses of an organ donor Eye surgery—to promote the correct function of the eye Fertility enhancement, certain procedures Guide dogs or other animals aiding the blind, deaf, and disabled Hospital services fees (lab work, therapy, nursing services, surgery, etc. Amending a tax return ) Lead-based paint removal Legal abortion Legal operation to prevent having children such as a vasectomy or tubal ligation Long-term care contracts, qualified Meals and lodging provided by a hospital during medical treatment Medical services fees (from doctors, dentists, surgeons, specialists, and other medical practitioners) Medicare Part D premiums Medical and hospital insurance premiums Nursing services Oxygen equipment and oxygen Part of life-care fee paid to retirement home designated for medical care Physical examination Pregnancy test kit Prescription medicines (prescribed by a doctor) and insulin Psychiatric and psychological treatment Social security tax, Medicare tax, FUTA, and state employment tax for worker providing medical care (see Wages for nursing services, below) Special items (artificial limbs, false teeth, eye-glasses, contact lenses, hearing aids, crutches, wheelchair, etc. Amending a tax return ) Special education for mentally or physically disabled persons Stop-smoking programs Transportation for needed medical care Treatment at a drug or alcohol center (includes meals and lodging provided by the center) Wages for nursing services Weight-loss, certain expenses for obesity Baby sitting and childcare Bottled water Contributions to Archer MSAs (see Publication 969) Diaper service Expenses for your general health (even if following your doctor's advice) such as— —Health club dues —Household help (even if recommended by a doctor) —Social activities, such as dancing or swimming lessons —Trip for general health improvement Flexible spending account reimbursements for medical expenses (if contributions were on a pre-tax basis) Funeral, burial, or cremation expenses Health savings account payments for medical expenses Illegal operation, treatment, or medicine Life insurance or income protection policies, or policies providing payment for loss of life, limb, sight, etc. Amending a tax return Maternity clothes Medical insurance included in a car insurance policy covering all persons injured in or by your car Medicine you buy without a prescription Nursing care for a healthy baby Prescription drugs you brought in (or ordered shipped) from another country, in most cases Nutritional supplements, vitamins, herbal supplements, “natural medicines,” etc. Amending a tax return , unless recommended by a medical practitioner as a treatment for a specific medical condition diagnosed by a physician Surgery for purely cosmetic reasons Toothpaste, toiletries, cosmetics, etc. Amending a tax return Teeth whitening Weight-loss expenses not for the treatment of obesity or other disease Meals and Lodging You can include in medical expenses the cost of meals and lodging at a hospital or similar institution if a principal reason for being there is to get medical care. Amending a tax return See Nursing home , later. Amending a tax return You may be able to include in medical expenses the cost of lodging not provided in a hospital or similar institution. Amending a tax return You can include the cost of such lodging while away from home if all of the following requirements are met. Amending a tax return The lodging is primarily for and essential to medical care. Amending a tax return The medical care is provided by a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital. Amending a tax return The lodging is not lavish or extravagant under the circumstances. Amending a tax return There is no significant element of personal pleasure, recreation, or vacation in the travel away from home. Amending a tax return The amount you include in medical expenses for lodging cannot be more than $50 for each night for each person. Amending a tax return You can include lodging for a person traveling with the person receiving the medical care. Amending a tax return For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. Amending a tax return Meals are not included. Amending a tax return Nursing home. Amending a tax return   You can include in medical expenses the cost of medical care in a nursing home, home for the aged, or similar institution, for yourself, your spouse, or your dependents. Amending a tax return This includes the cost of meals and lodging in the home if a principal reason for being there is to get medical care. Amending a tax return   Do not include the cost of meals and lodging if the reason for being in the home is personal. Amending a tax return You can, however, include in medical expenses the part of the cost that is for medical or nursing care. Amending a tax return Transportation Include in medical expenses amounts paid for transportation primarily for, and essential to, medical care. Amending a tax return You can include: Bus, taxi, train, or plane fares, or ambulance service, Transportation expenses of a parent who must go with a child who needs medical care, Transportation expenses of a nurse or other person who can give injections, medications, or other treatment required by a patient who is traveling to get medical care and is unable to travel alone, and Transportation expenses for regular visits to see a mentally ill dependent, if these visits are recommended as a part of treatment. Amending a tax return Car expenses. Amending a tax return   You can include out-of-pocket expenses, such as the cost of gas and oil, when you use your car for medical reasons. Amending a tax return You cannot include depreciation, insurance, general repair, or maintenance expenses. Amending a tax return   If you do not want to use your actual expenses for 2013, you can use the standard medical mileage rate of 24 cents per mile. Amending a tax return    You can also include parking fees and tolls. Amending a tax return You can add these fees and tolls to your medical expenses whether you use actual expenses or use the standard mileage rate. Amending a tax return Example. Amending a tax return In 2013, Bill Jones drove 2,800 miles for medical reasons. Amending a tax return He spent $500 for gas, $30 for oil, and $100 for tolls and parking. Amending a tax return He wants to figure the amount he can include in medical expenses both ways to see which gives him the greater deduction. Amending a tax return He figures the actual expenses first. Amending a tax return He adds the $500 for gas, the $30 for oil, and the $100 for tolls and parking for a total of $630. Amending a tax return He then figures the standard mileage amount. Amending a tax return He multiplies 2,800 miles by 24 cents a mile for a total of $672. Amending a tax return He then adds the $100 tolls and parking for a total of $772. Amending a tax return Bill includes the $772 of car expenses with his other medical expenses for the year because the $772 is more than the $630 he figured using actual expenses. Amending a tax return Transportation expenses you cannot include. Amending a tax return   You cannot include in medical expenses the cost of transportation in the following situations. Amending a tax return Going to and from work, even if your condition requires an unusual means of transportation. Amending a tax return Travel for purely personal reasons to another city for an operation or other medical care. Amending a tax return Travel that is merely for the general improvement of one's health. Amending a tax return The costs of operating a specially equipped car for other than medical reasons. Amending a tax return Disabled Dependent Care Expenses Some disabled dependent care expenses may qualify as either: Medical expenses, or Work-related expenses for purposes of taking a credit for dependent care. Amending a tax return (See chapter 32 and Publication 503, Child and Dependent Care Expenses. Amending a tax return ) You can choose to apply them either way as long as you do not use the same expenses to claim both a credit and a medical expense deduction. Amending a tax return How Do You Treat Reimbursements? You can include in medical expenses only those amounts paid during the taxable year for which you received no insurance or other reimbursement. Amending a tax return Insurance Reimbursement You must reduce your total medical expenses for the year by all reimbursements for medical expenses that you receive from insurance or other sources during the year. Amending a tax return This includes payments from Medicare. Amending a tax return Even if a policy provides reimbursement for only certain specific medical expenses, you must use amounts you receive from that policy to reduce your total medical expenses, including those it does not reimburse. Amending a tax return Example. Amending a tax return You have insurance policies that cover your hospital and doctors' bills but not your nursing bills. Amending a tax return The insurance you receive for the hospital and doctors' bills is more than their charges. Amending a tax return In figuring your medical deduction, you must reduce the total amount you spent for medical care by the total amount of insurance you received, even if the policies do not cover some of your medical expenses. Amending a tax return Health reimbursement arrangement (HRA). Amending a tax return   A health reimbursement arrangement is an employer-funded plan that reimburses employees for medical care expenses and allows unused amounts to be carried forward. Amending a tax return An HRA is funded solely by the employer and the reimbursements for medical expenses, up to a maximum dollar amount for a coverage period, are not included in your income. Amending a tax return Other reimbursements. Amending a tax return   Generally, you do not reduce medical expenses by payments you receive for: Permanent loss or loss of use of a member or function of the body (loss of limb, sight, hearing, etc. Amending a tax return ) or disfigurement to the extent the payment is based on the nature of the injury without regard to the amount of time lost from work, or Loss of earnings. Amending a tax return   You must, however, reduce your medical expenses by any part of these payments that is designated for medical costs. Amending a tax return See How Do You Figure and Report the Deduction on Your Tax Return , later. Amending a tax return   For how to treat damages received for personal injury or sickness, see Damages for Personal Injuries , later. Amending a tax return You do not have a medical deduction if you are reimbursed for all of your medical expenses for the year. Amending a tax return Excess reimbursement. Amending a tax return   If you are reimbursed more than your medical expenses, you may have to include the excess in income. Amending a tax return You may want to use Figure 21-A to help you decide if any of your reimbursement is taxable. Amending a tax return Premiums paid by you. Amending a tax return   If you pay either the entire premium for your medical insurance or all of the costs of a plan similar to medical insurance and your insurance payments or other reimbursements are more than your total medical expenses for the year, you have an excess reimbursement. Amending a tax return Generally, you do not include the excess reimbursement in your gross income. Amending a tax return Premiums paid by you and your employer. Amending a tax return   If both you and your employer contribute to your medical insurance plan and your employer's contributions are not included in your gross income, you must include in your gross income the part of your excess reimbursement that is from your employer's contribution. Amending a tax return   See Publication 502 to figure the amount of the excess reimbursement you must include in gross income. Amending a tax return Reimbursement in a later year. Amending a tax return   If you are reimbursed in a later year for medical expenses you deducted in an earlier year, you generally must report the reimbursement as income up to the amount you previously deducted as medical expenses. Amending a tax return   However, do not report as income the amount of reimbursement you received up to the amount of your medical deductions that did not reduce your tax for the earlier year. Amending a tax return For more information about the recovery of an amount that you claimed as an itemized deduction in an earlier year, see Itemized Deduction Recoveries in chapter 12. Amending a tax return Figure 21-A. Amending a tax return Is Your Excess Medical Reimbursement Taxable? Please click here for the text description of the image. Amending a tax return Figure 21-A. Amending a tax return Is Your Excess Medical Reimbursement Taxable? Medical expenses not deducted. Amending a tax return   If you did not deduct a medical expense in the year you paid it because your medical expenses were not more than 10% of your AGI (7. Amending a tax return 5% of your AGI if either you or your spouse was age 65 or older), or because you did not itemize deductions, do not include the reimbursement up to the amount of the expense in income. Amending a tax return However, if the reimbursement is more than the expense, see Excess reimbursement , earlier. Amending a tax return Example. Amending a tax return For 2013, you were unmarried and under age 65 and you had medical expenses of $500. Amending a tax return You cannot deduct the $500 because it is less than 10% of your AGI. Amending a tax return If, in a later year, you are reimbursed for any of the $500 in medical expenses, you do not include the amount reimbursed in your gross income. Amending a tax return Damages for Personal Injuries If you receive an amount in settlement of a personal injury suit, part of that award may be for medical expenses that you deducted in an earlier year. Amending a tax return If it is, you must include that part in your income in the year you receive it to the extent it reduced your taxable income in the earlier year. Amending a tax return See Reimbursement in a Later Year , discussed under How Do You Treat Reimbursements, earlier. Amending a tax return Future medical expenses. Amending a tax return   If you receive an amount in settlement of a damage suit for personal injuries, part of that award may be for future medical expenses. Amending a tax return If it is, you must reduce any future medical expenses for these injuries until the amount you received has been completely used. Amending a tax return How Do You Figure and Report the Deduction on Your Tax Return? Once you have determined which medical expenses you can include, you figure and report the deduction on your tax return. Amending a tax return What Tax Form Do You Use? You figure your medical expense deduction on Schedule A (Form 1040). Amending a tax return You cannot claim medical expenses on Form 1040A or Form 1040EZ. Amending a tax return If you need more information on itemized deductions or you are not sure if you can itemize, see chapter 20. Amending a tax return Enter the amount you paid for medical and dental expenses on Schedule A (Form 1040). Amending a tax return This should be your expenses that were not reimbursed by insurance or any other sources. Amending a tax return Generally, you can deduct only the amount of your medical and dental expenses that is more than 10% of your AGI (7. Amending a tax return 5% if either you or your spouse was age 65 or older) shown on line 38, Form 1040. Amending a tax return Impairment-Related Work Expenses If you are a person with a disability, you can take a business deduction for expenses that are necessary for you to be able to work. Amending a tax return If you take a business deduction for impairment-related work expenses, do not take a medical deduction for the same expenses. Amending a tax return You have a disability if you have: A physical or mental disability (for example, blindness or deafness) that functionally limits your being employed, or A physical or mental impairment (for example, a sight or hearing impairment) that substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, or working. Amending a tax return Impairment-related expenses defined. Amending a tax return   Impairment-related expenses are those ordinary and necessary business expenses that are: Necessary for you to do your work satisfactorily, For goods and services not required or used, other than incidentally, in your personal activities, and Not specifically covered under other income tax laws. Amending a tax return Where to report. Amending a tax return   If you are self-employed, deduct the business expenses on the appropriate form (Schedule C, C-EZ, E, or F) used to report your business income and expenses. Amending a tax return   If you are an employee, complete Form 2106, Employee Business Expenses, or Form 2106-EZ, Unreimbursed Employee Business Expenses. Amending a tax return Enter on Schedule A (Form 1040), that part of the amount on Form 2106, or Form 2106-EZ, that is related to your impairment. Amending a tax return Enter the amount that is unrelated to your impairment also on Schedule A (Form 1040). Amending a tax return Your impairment-related work expenses are not subject to the 2%-of-adjusted-gross-income limit that applies to other employee business expenses. Amending a tax return Example. Amending a tax return You are blind. Amending a tax return You must use a reader to do your work. Amending a tax return You use the reader both during your regular working hours at your place of work and outside your regular working hours away from your place of work. Amending a tax return The reader's services are only for your work. Amending a tax return You can deduct your expenses for the reader as business expenses. Amending a tax return Health Insurance Costs for Self-Employed Persons If you were self-employed and had a net profit for the year, you may be able to deduct, as an adjustment to income, amounts paid for medical and qualified long-term care insurance on behalf of yourself, your spouse, your dependents, and, your children who were under age 27 at the end of 2013. Amending a tax return For this purpose, you were self-employed if you were a general partner (or a limited partner receiving guaranteed payments) or you received wages from an S corporation in which you were more than a 2% shareholder. Amending a tax return The insurance plan must be established under your trade or business and the deduction cannot be more than your earned income from that trade or business. Amending a tax return You cannot deduct payments for medical insurance for any month in which you were eligible to participate in a health plan subsidized by your employer, your spouse's employer, or, an employer of your dependent or your child under age 27 at the end of 2013. Amending a tax return You cannot deduct payments for a qualified long-term care insurance contract for any month in which you were eligible to participate in a long-term care insurance plan subsidized by your employer or your spouse's employer. Amending a tax return If you qualify to take the deduction, use the Self-Employed Health Insurance Deduction Worksheet in the Form 1040 instructions to figure the amount you can deduct. Amending a tax return But if any of the following applies, do not use that worksheet. Amending a tax return You had more than one source of income subject to self-employment tax. Amending a tax return You file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. Amending a tax return You are using amounts paid for qualified long-term care insurance to figure the deduction. Amending a tax return If you cannot use the worksheet in the Form 1040 instructions, use the worksheet in Publication 535, Business Expenses, to figure your deduction. Amending a tax return Note. Amending a tax return When figuring the amount you can deduct for insurance premiums, do not include any advance payments shown on Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments. Amending a tax return If you are claiming the health coverage tax credit, subtract the amount shown on Form 8885, from the total insurance premiums you paid. Amending a tax return Do not include amounts paid for health insurance coverage with retirement plan distributions that were tax-free because you are a retired public safety officer. Amending a tax return Where to report. Amending a tax return    You take this deduction on Form 1040. Amending a tax return If you itemize your deductions and do not claim 100% of your self-employed health insurance on Form 1040, you can generally include any remaining premiums with all other medical expenses on Schedule A (Form 1040), subject to the 10% limit (7. Amending a tax return 5% if either you or your spouse was age 65 or older). Amending a tax return See Self-Employed Health Insurance Deduction in chapter 6 of Publication 535, Business Expenses, and Medical and Dental Expenses in the Instructions for Schedule A (Form 1040), for more information. Amending a tax return Prev  Up  Next   Home   More Online Publications
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Amending a tax return Some employees may be able to deduct certain work-related expenses. The following facts from the IRS can help you determine which expenses are deductible as an employee business expense. You must be itemizing deductions on IRS Schedule A to qualify. Amending a tax return Expenses that qualify for an itemized deduction generally include: Amending a tax return Business travel away from home Amending a tax return Business use of your car Amending a tax return Business meals and entertainment Amending a tax return Travel Amending a tax return Use of your home Amending a tax return Education Amending a tax return Supplies Amending a tax return Tools Amending a tax return Miscellaneous expenses Amending a tax return You must keep records to prove the business expenses you deduct. For general information on recordkeeping, see IRS Publication 552, Recordkeeping for Individuals available on this website, or by calling 1-800-TAX-FORM (800-829-3676). Amending a tax return If your employer reimburses you under an accountable plan, you should not include the payments in your gross income, and you may not deduct any of the reimbursed amounts. Amending a tax return An accountable plan must meet three requirements: Amending a tax return You must have paid or incurred expenses that are deductible while performing services as an employee. Amending a tax return Amending a tax return You must adequately account to your employer for these expenses within a reasonable time period. Amending a tax return Amending a tax return You must return any excess reimbursement or allowance within a reasonable time period. Amending a tax return If the plan under which you are reimbursed by your employer is non-accountable, the payments you receive should be included in the wages shown on your Form W-2. You must report the income and itemize your deductions to deduct these expenses. Amending a tax return Generally, you report unreimbursed expenses on IRS Form 2106 or IRS Form 2106-EZ and attach it to Form 1040. Deductible expenses are then reported on IRS Schedule A, as a miscellaneous itemized deduction subject to a rule that limits your employee business expenses deduction to the amount that exceeds 2 percent of your adjusted gross income. Amending a tax return For more information see IRS Publication 529, Miscellaneous Deductions, which is available on this website, or by calling 1-800-TAX-FORM (800-829-3676). Amending a tax return