As medical insurance goes up, many more folks are dipping into their own pockets to pay for healthcare.
The only good news is that you may be able to deduct some of those out-of-pocket costs on your tax return. Basically, any medical expense that is not reimbursed by your insurance company is deductible as a medical expense.
So if you paid for prescription drugs, contact lenses, hearing aids, alcoholism and drug abuse treatment programs, lead-paint removal products and orthopedic shoes, you can deduct those expenses on Schedule A – Itemized Deductions. Same goes for those childbirth classes you took, presuming they are part of your obstetrical care.
If you are medically considered obese, weight-loss counseling is deductible, but the corresponding food is not. So if you join Jenny Craig, you can deduct the monthly fees for the counseling, but the cost of those prepackaged meals is on your dime. And forget the boob job. Cosmetic surgery is not deductible.
If you happened to switch jobs during the year and made COBRA payments to continue your health insurance for a few months until your new job's insurance plan kicked in, those payments are deductible as medical expenses, too.
Granted, all medical expenses are required to total at least 7.5 percent of your adjusted gross income to be deductible. So if your AGI was $50,000, only expenses that amount to more than $3,750 are deductible. That may seem like a big number to beat, but those expenses can add up quickly, so start tallying.
And be sure to check out the IRS Publication 502 — Medical and Dental Expenses — for a complete list of deductible medical expenses.
Tracy's Tax Tips!
Tracy Byrnes is a New York Post business writer and a regular guest on The Cost of Freedom.
Want more business analysis, hot stock tips, and the best advice for your money? Tune in Saturday mornings for "The Cost of Freedom," and get the financial news you need!
• 10am ET: Bulls & Bears — Financial news with a FOX edge!
• 10:30am ET: Cavuto on Business — Make more with your money.
• 11am ET: Forbes on FOX — Expert advice on investing.
• 11:30am ET: Cashin' In — The name says it all!
Tracy Byrnes joined FOX Business Network (FBN) in October 2007 as a reporter.