- The Washington Times - Wednesday, November 9, 2005

The Internal Revenue Service severely limits tax relief for medical expenses. To begin with, these expenditures are deductible only if you forego the standard deduction and itemize on Schedule A of Form 1040. Another requirement for any write-off is that your payments are for bills that are not covered by insurance, reimbursed by your employer or otherwise satisfied.

The big hurdle is that the expenses must be sizable. Payments are allowable only to the extent that their total in any one year exceeds 7.5 percent of AGI, short for adjusted gross income. AGI is the amount listed after all reportable income is offset by certain deductions like alimony payments and money moved into retirement plans, but before taking the standard deduction or itemizing for expenditures like real estate taxes and charitable contributions. So an AGI of $100,000 means no deduction for the first $7,500 of medical expenses.

Assuming you incur costs that surpass the 7.5 percent threshold, an often-overlooked outlay begins as soon as you leave home. Your deductibles include travel for medical reasons to and from doctors, clinics, hospitals and the like. When you travel to and from your treatments by plane, train, bus or taxi, just make sure to keep track of your fares and claim them as medical expenses.

If you use your own auto, you have two options on handling the expenses. Either claim actual costs of gas and oil (but not depreciation on your vehicle) or use a standard mileage rate, with a separate deduction for parking fees and bridge or highway tolls. The standard rate is 15 cents a mile for the first eight months of tax year 2005, up from 14 cents a mile for tax year 2004. In recognition of the spike in gas prices caused by Hurricane Katrina, the IRS announced a September increase in the standard rate to 22 cents a mile for the final four months of 2005. If your medical mileage tends to be small, you probably prefer the standard rate for convenience.

An example: To obtain medical care during 2005, you drive 800 miles during the first eight months and 400 miles during the final four months and pay $50 for parking charges and bridge tolls. Your allowable deduction: $258 (800 miles times 15 cents equals $120 and 400 miles times 22 cents equals $88, plus $50 parking).

It is advisable, in the event the IRS questions your medical travel, to be able to substantiate your deductions with a glove compartment diary in which you note why and how far you went, as well as what you spent on parking. There is no requirement that you use the same car each time. If you rent an auto and drive it just for medical travel, include the entire rental charge with your other medical expenses.

Drive within the speed limit. The IRS refuses to go along with a medical deduction for a traffic ticket, even if you were rushing your pregnant wife to the hospital.


Sign up for Daily Newsletters

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide