What Medical Costs Are Tax Deductible?

Cancer care is costly, even when you have health insurance. Your insurance may cover only certain expenses, leaving you responsible for co-payments, deductibles, and noncovered items or services. For people who are underinsured or uninsured, the financial strain is even greater.

You may get some relief by claiming a U.S. income tax deduction for the medical expenses that were not covered or reimbursed.

Your deduction is calculated by adding up all of those expenses, then figuring the amount that is more than 7.5 percent of your adjusted gross income. For example, 7.5 percent of an adjusted gross income of $40,000 is $3,000. You can deduct the amount of your expenses above $3,000. Include only those expenses that were paid in the year for which you are filing, not when the services were provided.

To make things easier on yourself, save all receipts from medical-related services and any claim paperwork you receive from your insurance company. Keep these together in one place (an accordion file or large drawer or box works well).
Here are some tax-deductible health care expenses:

· Health insurance premiums (not including those paid by employer unless included in Box 1 of your W-2 form)
· Transportation or mileage to and from appointments
· Acupuncture
· Breast reconstruction surgery
· Expenses for special equipment and certain adaptations to your home
· Prescription medicines (insulin is the only nonprescribed drug allowed; drugs brought or shipped in from other countries are not allowed unless the FDA says they may be legally imported by individuals)
· Long-term care
· Home care or nursing services (but not household or personal services)
· Lab fees
· Psychiatric and psychological care
· Stop-smoking programs
· Surgery
· Wigs
· X-rays
· Dental treatment, including fees paid to dentists for x-rays, fillings, braces, extraction and dentures.