With or without health insurance, most people will have to come out of pocket for some medical expenses. Most doctors’ visits require a copay for those with insurance, which is a payment that is made before the insurance company picks up the rest of the bill. For those without insurance, the entire balance is due for any medical and dental bills incurred. Medical costs can be high and to help offset this expense on peoples income, deducting medical expenses is permitted on taxes.
For the 2012 tax season, medical expenses for over seven and a half percent of the household income may be deducted on taxes. This is based on the adjusted gross income rather than net or gross income. Medical and dental expenses may be deducted through itemized deductions rather than through standard deduction. Only health and medical expenses that are not reimbursed may be deducted through taxes. If you are reimbursed for any medical expenses through your job, your health insurance, or other deductions, you may not claim these amounts as a medical tax deduction.
The 2012 tax season is the last year for deducting medical expenses at a rate of seven and a half percent. During the 2013 tax year, medical expenses will have to be 10 percent of your adjusted gross income to be deducted, due to the new Affordable Health Act passed in 2010. If you plan to have work done and are on a payment plan for the medical expense, consider paying for the procedure in one calendar year to have a better chance of the expenses reaching the necessary percentage as a tax write off.