You may claim medical tax deductions for a number of reasons, but few people realize that allergies are one of those reasons. As a qualified medical expense, the costs related to treating allergies may be claimed on your tax return and could ultimately lower your tax burden. Here are some things you need to know to claim allergies as a medical tax deduction.
Deducting Medical Costs in General
To claim medical tax deductions, you have to itemize your deductions instead of taking the standard deduction for your income bracket and marital status. In addition, medical costs are only tax deductible if they exceed 10 percent of your adjusted gross income. For example, if you make $50,000 and you spent $7,000 on medical expenses (including costs associated with allergies), you can only deduct $2,000 — the amount over 10 percent of your adjusted gross income.
To claim a medical tax deduction, you have to itemize your deductions, but you can include a lot of medical-related costs for you, your spouse, and children, including:
- Doctor visits
- Health insurance deductibles
- Copays and premiums not paid by your employer
- Special medical devices, such as inhalers or nebulizers
- Traveling to and from doctors, including lodging if you travel to another town to see a specialist
Depending on the severity of the allergy and your income, these costs can add up fast.
Special Diets and Foods
If you or one of your family members has food allergies, you may be able to deduct some of the costs related to having a special diet. However, there are a number of requirements you have to meet.
First of all, the special food must be medically necessary and prescribed by a doctor. It does not count if you’re simply changing your diet to feel better and be healthier.
Second, the new food must cost more than the food you’re substituting for. You can also only deduct the difference in the costs. For example, someone with celiac disease can’t eat wheat or gluten. If regular wheat pasta costs $1 a box and gluten-free pasta costs $4 a box, he or she can deduct $3 for the cost of the food.
Third, you have to keep very detailed records to prove what you bought, how much it costs, and what it’s substituting for. This includes keeping receipts plus a log of what food you bought, the food it’s substituting for, and the estimated cost for the original food product.
Home Renovations for Allergies and Asthma
It’s also possible to deduct home renovations made for medical reasons. This can include an air purification system, removing carpeting that gathers dust and exacerbates asthma, and installing a wheelchair ramp. However, once again there are a number of limitations.
To qualify for a medically necessary home renovation, you will need a prescription for the change from a doctor. In addition, you will not be able to deduct the entire cost. If you own your own house, you can deduct only the difference between the cost of the renovation and how much it increased your house’s value. For example, let’s say you spend $7,000 removing carpeting and adding new flooring. The renovation increases your house’s value by $5,000. You can only deduct the remaining $2,000.
However, the rules are somewhat more lenient for renters who make improvements to a property that is not their own. In that case, all costs associated with the improvement are tax deductible. But as with all medical tax deductions, it’s important to keep accurate records of your costs, including a prescription or recommendation for the renovation from a physician.
Whether you own or rent, you can deduct the entire cost of detachable equipment, such as a medically prescribed window air conditioner that improves someone’s condition. You can also deduct the costs of operating and maintaining the equipment, including repair costs.
To learn more about medical tax deductions, including allergy and asthma costs, see IRS Publication 502.
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