A cancer diagnosis can be hard to stomach for more reasons than one. Not only can it be a terrifying illness to fight through, but the financial ramifications can be quite challenging to face. One's insurance policy can help to cover the bills, but most cancer patients will have a number of additional payments they need to cover.
Cancer isn't cheap, after all. Cancer patients collectively pay over $4 billion in treatment and associated costs each year. It's important that those struggling with the disease find financial relief anywhere that they can.
One key place might be in their taxes. It's essential that cancer patients understand how they can deduct out-of-pocket costs from their yearly tax returns. This can give them a substantial break on their taxes and provide great relief. Read on for more information on medical tax deductions.
Who Is Eligible For Medical Tax Deductions?
Medical tax deductions can be greatly beneficial to those that struggle with the huge burden of cancer treatment. But not everyone is eligible for such benefits. As of 2017, medical deductions must exceed 10 % of a person's adjusted gross income to be eligible. Many people get discouraged by that high number but feel surprised to find how easily they reach that benchmark.
Any medical expenses that are paid for by an individual and not an insurance company are deductible! These are costs paid for by cash, check, or credit card in the given year that one is filing for a tax return. Examples of such expenses include premiums paid to health insurance plans, payments to health care providers, and prescription medications.
Self-employed taxpayers don’t need to itemize their deductions in order to deduct their insurance premiums. Self-employed taxpayers can actually deduct their self-employed health insurance premiums as a deduction to their gross income.
Many taxpayers underestimate how high their expenses actually are when it comes to medical treatment. It's important that one understands which expenses are deductible so that no potential costs are left out when coming to a total.
Immediate Medical Attention
As mentioned previously, premiums paid to a health insurance plan can be one of the main examples of a deductible expense. These need to be payments made to private health insurance by the individual, and not an employer-paid premium or one that is later reimbursed by an employer.
Payments made to doctors and health care providers that were not covered by insurance are deductible and another primary example of a deductible expense.
Ancillary Costs Of Treatment
Inpatient care in a medical center or hospital can be deducted, as can the cost of specific cancer treatments such as chemotherapy or radiation therapy. In some situations, these treatments might be covered by insurance. Prescription medications not covered by insurance are a deductible expense.
As are more cosmetic concerns, such as wigs or any reconstructive surgery that needs to be done as a result of cancer damage.
Mental Health & Travel Costs
One area that many families forget to include is the cost of mental health. Any money spent on a therapist or psychologist can also be put towards a tax deduction total. Appointments with doctors for other focuses, such as vision, hearing, or dental, all fall under the umbrella of tax deduction.
Another area that many don't realize they can include is travel. As long as the primary reason for one's travel is medical care, the costs of travel can be deductible on one's taxes. Gas mileage traveling to and from hospitals and medical appointments can be written off. So can parking, tolls, and fares related to such trips.
Lodging as a need, in such a trip, can also be written off, though there is a limit of $50 per person per day. Last but not least, any special equipment that needs to be installed in an automobile for an ill person can be deducted as a medical expense. For more, you can refer to the detailed list that the IRS has put together of qualifying expenses.
Filing For Your Medical Tax Deduction
When it's time to file your taxes, you'll need to be well-prepared. You should have hard evidence of all your medical expenses organized and on file. In order to claim medical deductions with the IRS, you'll need to file Schedule A, also known as a form 1040. It's advisable to start a notebook or binder at home the day you are diagnosed.
This can provide a home base for your receipts and bills as they add up over the year. Having such a binder can be hugely helpful when tax season rolls around. Not all families will need an accountant on hand to help with medical deductions. But many can benefit from the help of an experienced professional.
An accountant can help ensure that your family is getting the maximum deduction possible. Medical expenses can be quite overwhelming but organizing your deductible expenses can help you save on cash you wouldn't need to be spending if you were healthy.
Understanding Medical Tax Deductions
A cancer diagnosis can feel quite overwhelming. It can also be a huge strain on your family's bank account. Understanding how medical tax deductions work can help to provide greater financial stability for you and your family in this difficult time. Need more advice for tax season? Let's help you fill out a pay stub today!