Even in retirement, most of us will file our income taxes each spring. Luckily for retirees, unreimbursed medical expenses, or expenses paid for medical care that were not reimbursed by your healthcare plan, can be claimed as a deduction on your income taxes. Since deductions can help you save on your tax bill, it is wise to pay attention to all of the write-offs available to you. Here’s what you need to know.
Are you itemizing your tax return? Some people simply claim their standard deduction, because it amounts to more than all of their individual deductions added together.
For 2020, the standard deduction for a single taxpayer or a married taxpayer filing separately is $12,400. For married taxpayers filing a joint return, the standard deduction is $24,800.
Plus, taxpayers who are blind or over age 65 are eligible for an additional standard deduction of $1,300 if married filing jointly, or $1,650 if single or head of household.
If all of your deductions added together do not exceed your standard deduction, you may not need to file an itemized return. Talk to your tax professional to be sure.
If you do file an itemized return… Medical expenses that were not covered by your healthcare plan can be claimed as a deduction, to the extent that the amount exceeds 7.5 percent of your adjusted gross income.
You can claim expenses such as vision, dental, or hearing care, including eyeglasses, contact lenses, dentures, or hearing aids.
Out-of-pocket spending on prescription medications and insulin can also be claimed as a deduction. If you travel to receive medical care, you can claim mileage and other travel-related expenses such as bus fares, tolls, or parking fees.
Certain medical expenses cannot be claimed on your taxes. These include cosmetic procedures, vitamins and supplements, and nonprescription medications (except insulin).
Please note that this article is not intended to provide you with tax advice. If you need further information, consult with your tax professional to find out if your medical expenses qualify you for a medical expense deduction under IRS rules.