Important Changes
Standard mileage rate. The standard mileage rate
allowed for out-of-pocket expenses for your car when you use your car for medical reasons
is now 13 cents a mile. See Transportation under What Medical Expenses
Are Deductible.
Self-employed health insurance deduction rate increase. For 2002,
the rate increased from 60% to 70%.
Obesity as a disease. The cost of participation in a weight-loss
program as a treatment for the disease of obesity is an amount paid for medical care.
However, the cost of purchasing reduced-calorie diet foods is not a medical expense if
these foods substitute for food you would normally consume to satisfy your nutritional
requirements. For more information, see Weight-Loss Program under What
Medical Expenses are Deductible and under What Expenses Are Not Deductible.
New health insurance credit. There is a new credit for health
insurance premiums paid by certain workers who are displaced by foreign trade or who are
receiving a pension from the Pension Benefit Guarantee Corporation. For more information,
see Health Insurance Credit near the end of this publication.
Important Reminder
Photographs of missing children. The Internal
Revenue Service is a proud partner with the National Center for Missing and Exploited
Children. Photographs of missing children selected by the Center may appear in this
publication on pages that would otherwise be blank. You can help bring these children home
by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you
recognize a child.
Introduction
This publication defines medical and dental care expenses. It contains an alphabetical
list of items that you can or cannot include in figuring your deduction. It explains how
to treat insurance reimbursements and other reimbursements you may receive for medical
care. It also explains how to claim your medical and dental expense deduction.
See How To Get Tax Help near the end of this publication for information about
getting publications and forms.
Comments and suggestions. We
welcome your comments about this publication and your suggestions for future editions.
You can e-mail us while visiting our web site at
www.irs.gov.
You can write to us at the following address:
Internal Revenue Service
Tax Forms and Publications
W:CAR:MP:FP
1111 Constitution Ave. NW
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be helpful if you would
include your daytime phone number, including the area code, in your correspondence.
What Is the Definition of Medical Care?
Medical care means amounts paid for the diagnosis, cure, mitigation,
treatment, or prevention of disease, and for treatments affecting any part or
function of the body. The medical care expenses must be primarily to alleviate or prevent
a physical or mental defect or illness.
Medical care 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.
Medical care expenses also include limited amounts paid for any qualified long-term care
insurance contract.
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. (But see Decedent under Whose Medical
Expenses Can You Include, later, for an exception.) If you pay medical expenses by
check, the day you mail or deliver the check generally is the date of payment. If you use
a pay-by-phone or on-line 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. You can include medical expenses you charge to your credit card in
the year the charge is made. It does not matter when you actually pay the amount charged.
If you did not claim a medical or dental expense that would have been deductible in an
earlier year, you can file Form 1040X, Amended U.S. Individual Income Tax Return,
for the year in which you overlooked the expense.
Do not claim the expense on this year's return. Generally, an amended return must be filed
within 3 years from the date the original return was filed or within 2 years from the time
the tax was paid, whichever is later.
You cannot include medical expenses that were paid by an insurance company or other
sources. This is true whether the payments were made directly to you, to the patient, or
to the provider of the medical services.
When do you include a decedent's medical expenses?
Medical expenses for a decedent that are paid from his or her estate are
treated as paid at the time the medical services were provided if they are paid
within the one-year period beginning with the day after the date of death. See Decedent
under Whose Medical Expenses Can You Include, later.
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. This
includes expenses for the decedent's spouse and dependents as well as for the decedent.
 Qualified
medical expenses paid before death by the decedent are not deductible if paid with a
tax-free distribution from any Archer MSA or Medicare+Choice MSA.
How Much of the Expense Can You Deduct?
You can deduct only the amount of your medical and dental expenses that is more
than 7.5% of your adjusted gross income (line 36, Form 1040).
In this publication, the term 7.5% limit is
used to refer to 7.5% of your adjusted gross income. The phrase subject to the
7.5% limit is also used. This phrase means that you must subtract 7.5% (.075) of your
adjusted gross income from your medical expenses to figure your medical expense deduction.
Example. Your adjusted gross income is $20,000, 7.5% of which is
$1,500. You paid medical expenses of $800. You cannot deduct any of your medical expenses
because they are not more than 7.5% of your adjusted gross income.
Separate returns. 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. 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.
Community property states. If you and your spouse live in a community property state and file separate
returns, any medical expenses paid out of community funds are divided equally. Each
of you should include half the expenses. If medical expenses are paid out of the separate
funds of one spouse, only the spouse who paid the medical expenses can include them. If
you live in a community property state, are married, and file a separate return, see
Publication 555, Community Property.
Whose Medical Expenses
Can You Include?
You can include medical expenses you pay for yourself and for the individuals discussed
in this section.
Spouse. You can include medical
expenses you paid for your spouse. To claim 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.
Example 1. Mary received medical treatment before she married
Bill. Bill paid for the treatment after they married. Bill can include these expenses in
figuring his medical expense deduction even if Bill and Mary file separate returns.
If Mary had paid the expenses before she and Bill married, Bill could not include
Mary's expenses in his separate return. Mary would include the amounts she paid during the
year in her separate return. If they filed a joint return, the medical expenses both paid
during the year would be used to figure their medical expense deduction.
Example 2. This year, John paid medical expenses for his wife
Louise, who died last year. John married Belle this year and they file a joint return.
Because John was married to Louise when she incurred the medical expenses, he can include
those expenses in figuring his medical deduction for this year.
Dependent. You can include
medical expenses you paid for your dependent. To claim 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. A person generally qualifies as your dependent for
purposes of the medical expense deduction if:
- That person lived with you for the entire year as a member of your household or is
related to you,
- That person was a U.S. citizen or resident, or a resident of Canada or Mexico for some
part of the calendar year in which your tax year began, and
- You provided over half of that person's total support for the calendar year.
You can include the medical expenses of any person who is your dependent even if you
cannot claim an exemption for him or her on your return.
Example. In 2001 your son was your dependent. In 2002 he no
longer qualified as your dependent. However, you paid $800 in 2002 for medical expenses
your son incurred in 2001, when he was your dependent. You can include the $800 in
figuring your medical expense deduction for 2002. You cannot include this amount on your
2001 tax return.
Adopted child. 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.
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.
But if you pay back medical expenses incurred and paid before adoption negotiations began,
you cannot include them as medical expenses.
 You may be able
to take a credit or exclusion for other expenses related to adoption. See Publication 968,
Tax Benefits for Adoption, for more information.
Child of divorced or separated parents. If either parent can claim a child as a dependent under the rules for divorced
or separated parents, each parent can include the medical expenses he or she pays
for the child even if an exemption for the child is claimed by the other parent.
Support claimed under a multiple support agreement.
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. If you
are considered to have provided more than half of a person's support under such an
agreement, you can include medical expenses you pay for that person, even if you cannot
claim the person as a dependent.
Any medical expenses paid by others who joined you in the agreement cannot be included
as medical expenses by anyone. However, you can include the entire unreimbursed amount you
paid for medical expenses.
Example. You and your three brothers each provide one-fourth of
your mother's total support. Under a multiple support agreement, you claim your mother as
a dependent. You paid all of her medical expenses. Your brothers repaid you for
three-fourths of these expenses. In figuring your medical expense deduction, you can
include only one-fourth of your mother's medical expenses. Your brothers cannot include
any part of the expenses. 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
amount you paid for her medical expenses in your medical expenses.
Decedent. 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. The expenses must be paid within the one-year
period beginning with the day after the date of death. 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.
Qualified
medical expenses paid before death by the decedent are not deductible if paid with a
tax-free distribution from any Archer MSA or Medicare+Choice MSA.
What if the decedent's return had been filed and the medical expenses were not
included? Form 1040X can be filed for the year or years the expenses
are treated as paid, unless the period for filing an amended return for that year has
passed. Generally, an amended return must be filed within 3 years of the date the original
return was filed, or within 2 years from the time the tax was paid, whichever date is
later.
Example. John properly filed his 2001 income tax return. He died
in 2002 with unpaid medical expenses of $1,500 from 2001 and $1,800 in 2002. His survivor
or personal representative can file an amended return for 2001 claiming the $1,500 medical
expenses. The $1,800 of medical expenses from 2002 can be included on the decedent's final
return for 2002.
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. 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.
What Medical Expenses Are Deductible?
Following is a list of items that you can include in figuring your medical
expense deduction. The items are listed in alphabetical order.
Abortion
You can include in medical expenses the amount you pay for a legal
abortion.
Acupuncture
You can include in medical expenses the amount you pay for
acupuncture.
Alcoholism
You can include in medical expenses amounts you pay for an inpatient's
treatment at a therapeutic center for alcohol addiction. This includes meals and
lodging provided by the center during treatment.
You can also include in medical expenses transportation costs you pay to attend
meetings of an Alcoholics Anonymous Club in your community if your attendance is pursuant
to medical advice that membership in the Alcoholics Anonymous Club is necessary for the
treatment of a disease involving the excessive use of alcoholic liquors.
Ambulance
You can include in medical expenses amounts you pay for ambulance
service.
Artificial Limb
You can include in medical expenses the amount you pay for an
artificial limb.
Artificial Teeth
You can include in medical expenses the amount you pay for artificial
teeth.
Autoette
See Wheelchair, later.
Birth Control Pills
You can include in medical expenses the amount you pay for birth
control pills prescribed by a doctor.
Braille Books and Magazines
You can include in medical expenses the part of the cost of Braille
books and magazines for use by a visually-impaired person that is more than the
cost of regular printed editions.
Capital Expenses
You can include in medical expenses amounts you pay for special
equipment installed in your home, or for improvements, if their main purpose is
medical care for you, your spouse, or a dependent. The cost of permanent improvements that
increase the value of the property may be partly included as a medical expense. The cost
of the improvement is reduced by the increase in the value of the property. The difference
is a medical expense. If the value of the property is not increased by the improvement,
the entire cost is included as a medical expense.
Certain improvements made to accommodate your home to your disabled condition, or that
of your spouse or your dependents who live with you, do not usually increase the value of
the home and the cost can be included in full as medical expenses. These improvements
include, but are not limited to, the following items.
- Constructing entrance or exit ramps for your home.
- Widening doorways at entrances or exits to your home.
- Widening or otherwise modifying hallways and interior doorways.
- Installing railings, support bars, or other modifications to bathrooms.
- Lowering or modifying kitchen cabinets and equipment.
- Moving or modifying electrical outlets and fixtures.
- Installing porch lifts and other forms of lifts but generally not elevators.
- Modifying fire alarms, smoke detectors, and other warning systems.
- Modifying stairways.
- Adding handrails or grab bars anywhere (whether or not in bathrooms).
- Modifying hardware on doors.
- Modifying areas in front of entrance and exit doorways.
- Grading the ground to provide access to the residence.
Only reasonable costs to accommodate a home to a disabled condition are considered
medical care. Additional costs for personal motives, such as for architectural or
aesthetic reasons, are not medical expenses.
Capital expense worksheet. Use Worksheet 1 to figure the
amount of your capital expense to include in your medical expenses.
Example. You have a heart ailment. On your doctor's advice, you
install an elevator in your home so that you will not have to climb stairs. The elevator
costs $8,000. An appraisal shows that the elevator increases the value of your home by
$4,400. You figure your medical expense as shown in the illustrated example of Worksheet
1.
Operation and upkeep. Amounts you pay for operation and upkeep of a
capital asset qualify as medical expenses, as long as the main reason for them is medical
care. This is so even if none or only part of the original cost of the capital asset
qualified as a medical care expense.
Example. If, in the previous example, the elevator increased the
value of your home by $8,000, you would have no medical expense for the cost of the
elevator. However, the cost of electricity to operate the elevator and any costs to
maintain it are medical expenses as long as the medical reason for the elevator exists.
Improvements to property rented by a person with a disability.
Amounts paid by a person with a disability to buy and install special plumbing fixtures,
mainly for medical reasons, in a rented house are medical expenses.
Example. John has arthritis and a heart condition. He cannot
climb stairs or get into a bathtub. On his doctor's advice, he installs a bathroom with a
shower stall on the first floor of his two-story rented house. The landlord did not pay
any of the cost of buying and installing the special plumbing and did not lower the rent.
John can include in medical expenses the entire amount he paid.
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