[D]id you know medical expenses are deductible only to the extent they exceed 7.5% of a taxpayer’s adjusted gross income. Beginning in 2013 you may only make these deductions if they exceed 10% of a taxpayer’s adjusted gross income. The medical expense deduction is limited to un-reimbursed, i.e. out-of-pocket, expenditures. Such medical expenses are only deductible if the taxpayer is itemizing. You determine the amount to deduct on Schedule “A” of Form 1040.
Those electing to take the standard deduction do not benefit from medical expense deductions.
The entire cost of a long-term care nursing home facility, including meals and lodging, is a deductible medical expense if the principal reason for admission to the facility is the availability of medical care. However in an assisted living facility or personal care home, only a portion of the cost may be deductible.
Equipment and home modifications to accommodate the handicapped (no age limit) that do not increase the market value of the home are deductible as a medical expense. Examples of such deductible improvements include building wheelchair ramps and widening entrances to the home.
When a person dies owing medical expenses, and those expenses are paid by the estate within one year, a medical expense deduction can be taken on the decedent’s final income tax return (Form 1040) or on the federal estate tax return (Form 706). If the estate is under the federally taxable limit, $5,120,000 in 2012, or if there will be no estate tax due because of the unlimited marital deduction, it makes sense to deduct these expenses on the personal income tax return.
These changes may affect the way you handle your medical expenses this year when the time comes to file your 2013 federal taxes in 2014.