You may not realize it, but the United States Tax Code allows you to deduct certain medical expenses from your federal income taxes. Among the medical expenses that may be deducted are expenses associated with acquiring durable medical equipment (DME).
According to the IRS website, a deduction can be taken for medical expenses incurred by you, your spouse, or a dependent.
The IRS defines DME as “certain medical equipment that is ordered by a doctor for use in the home.” Walkers, wheelchairs, and hospital beds are listed as examples. Please note that the DME expenses must be used to “…alleviate or prevent a physical or mental defect or illness.”
A few important notes:
- You may only deduct the cost of medical equipment that you have paid for during this year.
- You may not take a deduction if another person, such as relative, or an insurance company paid for the medical equipment.
- Crutches, service animals such as a guide dog, diagnostic services, hearing aids, telephones for the hearing impaired and wigs are examples of items that classify as DME.
- Items used for general health benefits (i.e., vitamins, maternity clothes, and personal-use items not associated with treating a medical condition) typically are not deductible.
For a complete list of items that are and are not deductible, visit the IRS website.
Remember, you may take a deduction only for medical equipment that you have paid for this year. You may only deduct the cost of medical expenses that exceed 7.5% of your Adjusted Gross Income (AGI). However, DME is not the only medical expense that is deductible. For this reason, it is very important to add up all deductible medical expenses that you have paid for your spouse, a dependent, a qualified relative, and yourself. After figuring out your total medical expenses for the year, subtract any portion of the cost that was paid for by insurance. Next, multiply your AGI by 7.5%. The portion of your medical expenses that exceed 7.5% of your AGI can be deducted.
Certain restrictions may apply. We advise you to be sure to contact your tax or financial consultant and/or visit the IRS website with any questions or for more information.