Are My Co-Pay Medical Expenses Tax Deductible

Q: My wife and I are preparing our taxes ourselves this year. We have over $1000 worth of medical co-pay expenses but we can’t get these expenses accepted. What should we do?

A: I assume you are using a computer software program to help you with your taxes.

If you and your wife are under age 65, then qualified medical and dental expenses — i.e. those bills paid to prevent, mitigate, diagnose or cure a physical or mental illness — are tax deductible only to the extent that they exceed 10% of your adjusted gross income or AGI.

If you are 65 or older, then your medical expenses (including those copays) are deductible only if they exceed 7.5% of your AGI.

Example: assume you and your wife are both in your 40s and you’re filing a joint tax return. Now assume that your combined adjusted gross income was $60,000 in 2013.

You would have had to have more than $6,000 in medical co-pays/medical bills before any of those expense were tax deductible.

So if you had, say, $7,000 in medical bills/co-pays, then the first $6,000 (which is 10% of $60,000) would NOT be tax deductible. The remaining $1,000 worth of your $7,000 in medical bills/co-pays would qualify as tax deductible.

This may be the reason why the computer program you are using is not accepting your medical co-pays. Even though $1,200 is a lot of money, it sounds like you probably don’t have enough medical bills in order to qualify for a medical tax deduction.

I hope this info helps you. And good luck in filing your taxes!

Editor’s Note:

To determine whether an expense is deductible, see Can I Deduct My Medical and Dental Expenses? on IRS.gov.

For additional information on medical expenses, including who will qualify as your dependent for purposes of the deduction, how to figure and how to report the deduction on your return, see IRS Publication 502Medical and Dental Expenses.

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