That doesn't necessarily mean you'll have to shoulder the entire burden. You may be able to deduct some of those costs from your IRS bill. For this purpose it is essential to maintain correct and substantial records to back up the claim for all deductions the IRS allows.
Keep the following in mind when creating your medical records, so you can take all the deductions available to you. Before assuming any deduction is allowable, however, be sure to consult the appropriate IRS tax publications or your tax advisor. Most medical related expenses must exceed 7.5 percent of your annual adjusted gross income in order to be deductible. Still, that may well happen in the case of chronic conditions or very serious acute medical problems.
Always retain these documents:
- All medical bills, paid or unpaid, by you or your insurance company
- All claims you have filed
- All vouchers for reimbursements
- A log of all conversations with insurers and medical personnel, including names, dates and brief descriptions
- Receipts for meals, lodging and gasoline or other travel costs - airplane or railway tickets (one of the most overlooked expenses)
- Long-distance telephone calls for medical discussions
- All prescriptions and also over-the-counter drugs recommended by a medical professional
Making sure you have all the documents you might need requires some thought and attention, too. So:
- Decide who will be responsible for collecting and filing documents, and at what intervals. (If you are a single head-of-household, you may want to ask a friend, relative or neighbor to help, especially during acute illnesses or conditions.)
- Create a file system in a filing cabinet or document file box available at office supply stores.
- Create a system for incoming documents for your review or action before they are filed.
- Keep a calendar on which you designate days for filing to be completed, bills paid or letters written/phone calls made.
If you use your own car, you can claim actual costs of gas and oil for the trips, or use the current standard mileage rate. In either case, you can also deduct parking fees and bridge or highway tolls. The standard mileage deduction for medical treatment car use is not the same as for business car use; it is far less, almost two-thirds less, at 15 cents a mile for 2005. Still, it's something.
The mileage deduction can apply to a wide range of medical needs, including:
- Driving a wheelchair-bound patient to school.
- Driving to Alcoholics Anonymous or Narcotics Anonymous meetings.
- Trips to visit a child at an institution if the visits are deemed essential to the child's treatment.
- Trips to visit family members in the hospital when a weakened condition makes your presence indispensable to care/recovery.
- A trip to bring back a family member who becomes ill abroad and cannot travel home without help.
- Trips to accompany ill or injured family members who cannot speak due to permanent or temporary medical conditions.
There are other deductions for which you might also qualify, so keep those receipts, as well. Some are:
Installing ramps.
- Widening doorways to accommodate wheelchairs.
- Bathroom railings and support bars.
- Modifying height of cabinets or equipment.
- Altering electrical outlets.
- Installing porch or stairway lifts, but not elevators (which could be used by anyone, not just the person in need of assistance ascending or descending).
- Modifications to stairways.
- Hardware alterations on doors.
- Installation of other grab bars and handrails.
- New landscape grading to accommodate specialized vehicles.
If you're in doubt about whether a purchase or trip is deductible, keep the receipt anyway, and mark it with a question mark. Then bring it up with your tax advisor, or research the expense with the IRS through its website at www.irs.gov.
