Medical Expenses You Can Deduct
A new year means a starting over in keeping track of certain records such as medical expenses. Here is a cute story just posted by TaxGirl on her website www.taxgirl.com about her recent adventures with her daughter. Within this story she has a link to medical expenses you can deduct (it’s quite long).
Those of you who follow me on Twitter (or in real life) know that one of my children has been sick for about a month. My middle child, Amy, has a form of vasculitis known as Henoch-Schonlein Purpura. It is a nasty and invasive – but fortunately not contagious – illness that attacks the joints and blood vessels in your body. The result is a horrific rash (you can Google it to see – I thought about posting an actual photo but it is really not a pretty sight), occasional fever and vomiting, swelling of the joints (sometime to the point of her not being able to walk) and blood in the urine. Again, not pretty. And not fun for a five year old.
We have been lucky in that, save for an experiment with raw milk gone awry, our children have been mostly healthy. I can’t imagine what it is like to have a child with a serious, long-term illness.
One of the things that I have learned over the last few weeks is how quickly medical expenses can add up – and I have good insurance. I have written post after post about what you can deduct in medical expenses but have rarely been in the position to take my own advice. My oldest daughter spent the first few days of her life in the NICU at Children’s Hospital of Philadelphia (CHOP); my youngest two have had minor surgeries (tonsils and adenoids); and my little boy – all boy – has seen to it that I’ve seen the inside of the ER (stitches at 2!). But those things were more or less one or two trip events.
With Amy and HSP, we’ve found ourselves driving back and forth to the doctor several times a week for testing – and once to CHOP to have the specialists in nephrology check out her kidneys. And the expenses are adding up. I thought it would be a good time to revisit the idea of medical expenses and what things are deductible… for me and for my readers.
I’m actually framing this post in terms of things I can deduct with respect to my daughter’s illness. If you’re looking for something more comprehensive, there is a more extensive list of medical expenses which may qualify for a deduction here.
A couple of quick things out of the way first: 1, Amy is my qualifying dependent so I can deduct medical expenses paid on her behalf and 2, I understand that I can only deduct those expenses which exceed 7.5% of my adjusted gross income (AGI).
So what can I deduct?
Co-pays. We have decent medical insurance but we are still subject to co-pays. I pay $20/visit to the doctor (a few of those trips this month) and $100/visit for the ER (one of those trips just last week when her labs came back with blood in her urine and an elevated white blood cell count).
Lab fees. My insurance covers some of our lab fees, but not all. She’s had several tubes of blood work and many cups of urine (four of those in one day last week) analyzed for protein counts, white blood cell counts and other abnormalities. Those fees not covered by our insurance, those that we pay out of pocket, are deductible.
Transportation costs. Luckily, my pediatrician’s office is walking distance from my house (about 2.5 miles) but in really cold or snowy weather, we’ll take the bus or drive. The bus fare is deductible – as is the mileage to and from the doctor. The standard medical mileage rate for 2009 is 24 cents per mile. Yes, I could also take the actual expenses associated with driving but I’m just not that organized at times like these.
CHOP is in the city, so we generally take a bus, train or drive to the hospital. The bus fare, train fare or car mileage is deductible.
Also deductible? The ridiculous cost of parking in the city.
And if I lived in New Jersey (shudder) and had to pay the toll to come into the city, that would also be deductible.
Lucky for us (and my record keeping), parking fees and tolls are deductible regardless of whether we use the actual expenses method or the standard medical mileage rate.
Even though I’m tagging along with Amy, the cost of my transportation is also deductible, since transportation expenses of a parent who must go with a child who needs medical care are deductible. My friends who often go with me for moral support to these things? Much appreciated, but not deductible.
We didn’t have to stay overnight (thank goodness) but if we had, we could deduct up to $50 for each night per person. My expenses would have been covered for same reason my transportation would have been included (because I’m the mom) – but only to $50. You and I both know that I couldn’t stay anywhere in Philadelphia that wouldn’t cause my mother to cry for $50… Considering that the best medical facilities for children, like Children’s Hospital of Philadelphia and Children’s Hospital of Boston, tend to be located in metropolitan areas, you’d think that those numbers would push up a little higher (Congress, a little help on this one, please?).
Thankfully, we don’t need any longer term options – like retrofitting our house with ramps, etc. Amy is a little gimpy now but the prognosis is 100% back to normal. But for parents who have to make accommodations or renovations in their home for sick or disabled children, it’s deductible.
So, what can’t I deduct?
The cost of child care. I have two other children that I did not relish dragging with me to the pediatrician, or to CHOP for goodness knows how long. I am lucky in that we have fabulous friends who were willing to watch my children while my husband and I went to the hospital with Amy. But if that didn’t happen, I would have had to get a babysitter. Believe it or not, that’s not deductible as a child care expense. You cannot deduct the cost of child care, even if it enables you, your spouse, or your dependent to get medical treatment.
Our meals. Since we were at the hospital for most of the day, my husband and I missed lunch. Can we deduct the cost of the munchies that we ended up getting from the hospital snack shop? Sadly, no. You can’t deduct the cost of meals that are not part of inpatient care.
Over the counter medicines. The doctor has recommended – but not prescribed – a number of over the counter medicines to keep Amy’s symptoms at bay. Despite the fact that some of them can run $10/bottle (have you seen the cost of children’s Motrin lately?), they’re not deductible. Except for insulin, you cannot deduct the cost of medicines that are not prescribed.
Personal care products. Amy is also using a number of products that don’t qualify as medicines but are part of keeping her comfortable. She has an itchy, scabby rash all over her body and I mean all over her body. She cries sometimes when she changes clothes and the rash keeps her up for hours and hours (two nights ago, we were up until 5am). Oatmeal baths and certain lotions are quite soothing for her. But since they’re not prescription-based, we can’t deduct them.
A lesson to be learned here? If the costs of these treatments are substantial, you may be able to deduct them by having your doctor write a prescription for them. This varies by drug and by doctor.
Another lesson learned? Many of these expenses may not be deductible as medical expenses but would have been considered “reimbursable items” for purposes of flexible spending accounts (FSA) and health flexible spending accounts (HSA). This is because these expenses are for medical purposes and not for every day or cosmetic use. There are limits and restrictions on these accounts – be sure that you understand them – as well as rules with respect to whether reimbursements may be taxable. So, not a panacea, but definitely worth checking out.
–
The last 23 days have been really difficult. I know that we are super lucky because the outlook for Amy is 100% recovery. Not all parents have that outcome. And as a mom, my heart goes out to them.
When children get sick, it can take quite a toll on a family. In addition to all of the worries and practical considerations, it can be quite expensive. Fortunately, with a little bit of tax planning, you can mitigate some of the expense and focus on what really matters: getting those kids better.
Happy New Year from E-File Magic. For all your 1099 needs check out our FREE Software!