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State Tax Returns

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State Tax Returns

State tax returns Publication 502 - Main Content Table of Contents What Are Medical Expenses? What Expenses Can You Include This Year?Community property states. State tax returns How Much of the Expenses Can You Deduct? Whose Medical Expenses Can You Include?Spouse Dependent Decedent What Medical Expenses Are Includible?Abortion Acupuncture Alcoholism Ambulance Annual Physical Examination Artificial Limb Artificial Teeth Bandages Birth Control Pills Body Scan Braille Books and Magazines Breast Pumps and Supplies Breast Reconstruction Surgery Capital Expenses Car Chiropractor Christian Science Practitioner Contact Lenses Crutches Dental Treatment Diagnostic Devices Disabled Dependent Care Expenses Drug Addiction Drugs Eye Exam Eyeglasses Eye Surgery Fertility Enhancement Founder's Fee Guide Dog or Other Service Animal Health Institute Health Maintenance Organization (HMO) Hearing Aids Home Care Home Improvements Hospital Services Insurance Premiums Intellectually and Developmentally Disabled, Special Home for Laboratory Fees Lactation Expenses Lead-Based Paint Removal Learning Disability Legal Fees Lifetime Care—Advance Payments Lodging Long-Term Care Meals Medical Conferences Medical Information Plan Medicines Nursing Home Nursing Services Operations Optometrist Organ Donors Osteopath Oxygen Physical Examination Pregnancy Test Kit Prosthesis Psychiatric Care Psychoanalysis Psychologist Special Education Sterilization Stop-Smoking Programs Surgery Telephone Television Therapy Transplants Transportation Trips Tuition Vasectomy Vision Correction Surgery Weight-Loss Program Wheelchair Wig X-ray What Expenses Are Not Includible?Baby Sitting, Childcare, and Nursing Services for a Normal, Healthy Baby Controlled Substances Cosmetic Surgery Dancing Lessons Diaper Service Electrolysis or Hair Removal Flexible Spending Account Funeral Expenses Future Medical Care Hair Transplant Health Club Dues Health Coverage Tax Credit Health Savings Accounts Household Help Illegal Operations and Treatments Insurance Premiums Maternity Clothes Medical Savings Account (MSA) Medicines and Drugs From Other Countries Nonprescription Drugs and Medicines Nutritional Supplements Personal Use Items Swimming Lessons Teeth Whitening Veterinary Fees Weight-Loss Program How Do You Treat Reimbursements?Insurance Reimbursement How Do You Figure and Report the Deduction on Your Tax Return?What Tax Form Do You Use? Sale of Medical Equipment or Property Damages for Personal Injuries Impairment-Related Work Expenses Health Insurance Costs for Self-Employed Persons COBRA Premium Assistance Health Coverage Tax CreditWho Can Take This Credit? Qualifying Family Member Qualified Health Insurance Nonqualified Health Insurance Eligible Coverage Month How To Take the Credit How To Get Tax HelpLow Income Taxpayer Clinics What Are Medical Expenses? Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. State tax returns These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. State tax returns They include the costs of equipment, supplies, and diagnostic devices needed for these purposes. State tax returns Medical care expenses must be primarily to alleviate or prevent a physical or mental defect or illness. State tax returns They do not include expenses that are merely beneficial to general health, such as vitamins or a vacation. State tax returns Medical expenses include the premiums you pay for insurance that covers the expenses of medical care, and the amounts you pay for transportation to get medical care. State tax returns Medical expenses also include amounts paid for qualified long-term care services and limited amounts paid for any qualified long-term care insurance contract. State tax returns What Expenses Can You Include This Year? You can include only the medical and dental expenses you paid this year, regardless of when the services were provided. State tax returns (But see Decedent under Whose Medical Expenses Can You Include, for an exception. State tax returns ) If you pay medical expenses by check, the day you mail or deliver the check generally is the date of payment. State tax returns If you use a “pay-by-phone” or “online” account to pay your medical expenses, the date reported on the statement of the financial institution showing when payment was made is the date of payment. State tax returns If you use a credit card, include medical expenses you charge to your credit card in the year the charge is made, not when you actually pay the amount charged. State tax returns If you did not claim a medical or dental expense that would have been deductible in an earlier year, you can file Form 1040X, Amended U. State tax returns S. State tax returns Individual Income Tax Return, for the year in which you overlooked the expense. State tax returns Do not claim the expense on this year's return. State tax returns Generally, an amended return must be filed within 3 years from the date the original return was filed or within 2 years from the time the tax was paid, whichever is later. State tax returns You cannot include medical expenses that were paid by insurance companies or other sources. State tax returns This is true whether the payments were made directly to you, to the patient, or to the provider of the medical services. State tax returns Separate returns. State tax returns   If you and your spouse live in a noncommunity property state and file separate returns, each of you can include only the medical expenses each actually paid. State tax returns Any medical expenses paid out of a joint checking account in which you and your spouse have the same interest are considered to have been paid equally by each of you, unless you can show otherwise. State tax returns Community property states. State tax returns   If you and your spouse live in a community property state and file separate returns or are registered domestic partners in Nevada, Washington, or California, any medical expenses paid out of community funds are divided equally. State tax returns Generally, each of you should include half the expenses. State tax returns If medical expenses are paid out of the separate funds of one individual, only the individual who paid the medical expenses can include them. State tax returns If you live in a community property state and are not filing a joint return, see Publication 555, Community Property. State tax returns How Much of the Expenses Can You Deduct? Generally, you can deduct on Schedule A (Form 1040) only the amount of your medical and dental expenses that is more than 10% of your AGI. State tax returns But if either you or your spouse was born before January 2, 1949, you can deduct the amount of your medical and dental expenses that is more than 7. State tax returns 5% of your AGI. State tax returns Example. State tax returns You are unmarried and were born after January 2, 1949, and your AGI is $40,000, 10% of which is $4,000. State tax returns You paid medical expenses of $2,500. State tax returns You cannot deduct any of your medical expenses because they are not more than 10% of your AGI. State tax returns Whose Medical Expenses Can You Include? You can generally include medical expenses you pay for yourself, as well as those you pay for someone who was your spouse or your dependent either when the services were provided or when you paid for them. State tax returns There are different rules for decedents and for individuals who are the subject of multiple support agreements. State tax returns See Support claimed under a multiple support agreement , later under Qualifying Relative. State tax returns Spouse You can include medical expenses you paid for your spouse. State tax returns To include these expenses, you must have been married either at the time your spouse received the medical services or at the time you paid the medical expenses. State tax returns Example 1. State tax returns Mary received medical treatment before she married Bill. State tax returns Bill paid for the treatment after they married. State tax returns Bill can include these expenses in figuring his medical expense deduction even if Bill and Mary file separate returns. State tax returns If Mary had paid the expenses, Bill could not include Mary's expenses in his separate return. State tax returns Mary would include the amounts she paid during the year in her separate return. State tax returns If they filed a joint return, the medical expenses both paid during the year would be used to figure their medical expense deduction. State tax returns Example 2. State tax returns This year, John paid medical expenses for his wife Louise, who died last year. State tax returns John married Belle this year and they file a joint return. State tax returns Because John was married to Louise when she received the medical services, he can include those expenses in figuring his medical expense deduction for this year. State tax returns Dependent You can include medical expenses you paid for your dependent. State tax returns For you to include these expenses, the person must have been your dependent either at the time the medical services were provided or at the time you paid the expenses. State tax returns A person generally qualifies as your dependent for purposes of the medical expense deduction if both of the following requirements are met. State tax returns The person was a qualifying child (defined later) or a qualifying relative (defined later), and The person was a U. State tax returns S. State tax returns citizen or national or a resident of the United States, Canada, or Mexico. State tax returns If your qualifying child was adopted, see Exception for adopted child , later. State tax returns You can include medical expenses you paid for an individual that would have been your dependent except that: He or she received gross income of $3,900 or more in 2013, He or she filed a joint return for 2013, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. State tax returns Exception for adopted child. State tax returns   If you are a U. State tax returns S. State tax returns citizen or national and your adopted child lived with you as a member of your household for 2013, that child does not have to be a U. State tax returns S. State tax returns citizen or national, or a resident of the United States, Canada, or Mexico. State tax returns Qualifying Child A qualifying child is a child who: Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew), Was: Under age 19 at the end of 2013 and younger than you (or your spouse, if filing jointly), Under age 24 at the end of 2013, a full-time student, and younger than you (or your spouse, if filing jointly), or Any age and permanently and totally disabled, Lived with you for more than half of 2013, Did not provide over half of his or her own support for 2013, and Did not file a joint return, other than to claim a refund. State tax returns Adopted child. State tax returns   A legally adopted child is treated as your own child. State tax returns This child includes a child lawfully placed with you for legal adoption. State tax returns   You can include medical expenses that you paid for a child before adoption if the child qualified as your dependent when the medical services were provided or when the expenses were paid. State tax returns   If you pay back an adoption agency or other persons for medical expenses they paid under an agreement with you, you are treated as having paid those expenses provided you clearly substantiate that the payment is directly attributable to the medical care of the child. State tax returns   But if you pay the agency or other person for medical care that was provided and paid for before adoption negotiations began, you cannot include them as medical expenses. State tax returns    You may be able to take a credit for other expenses related to an adoption. State tax returns See the Instructions for Form 8839, Qualified Adoption Expenses, for more information. State tax returns Child of divorced or separated parents. State tax returns   For purposes of the medical and dental expenses deduction, a child of divorced or separated parents can be treated as a dependent of both parents. State tax returns Each parent can include the medical expenses he or she pays for the child, even if the other parent claims the child's dependency exemption, if: The child is in the custody of one or both parents for more than half the year, The child receives over half of his or her support during the year from his or her parents, and The child's parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Live apart at all times during the last 6 months of the year. State tax returns This does not apply if the child's exemption is being claimed under a multiple support agreement (discussed later). State tax returns Qualifying Relative A qualifying relative is a person: Who is your: Son, daughter, stepchild, or foster child, or a descendant of any of them (for example, your grandchild), Brother, sister, half brother, half sister, or a son or daughter of any of them, Father, mother, or an ancestor or sibling of either of them (for example, your grandmother, grandfather, aunt, or uncle), Stepbrother, stepsister, stepfather, stepmother, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law, or Any other person (other than your spouse) who lived with you all year as a member of your household if your relationship did not violate local law, Who was not a qualifying child (see Qualifying Child, earlier) of any taxpayer for 2013, and For whom you provided over half of the support in 2013. State tax returns But see Child of divorced or separated parents , earlier, Support claimed under a multiple support agreement, next, and Kidnapped child under Qualifying Relative in Publication 501. State tax returns Support claimed under a multiple support agreement. State tax returns   If you are considered to have provided more than half of a qualifying relative's support under a multiple support agreement, you can include medical expenses you pay for that person. State tax returns A multiple support agreement is used when two or more people provide more than half of a person's support, but no one alone provides more than half. State tax returns   Any medical expenses paid by others who joined you in the agreement cannot be included as medical expenses by anyone. State tax returns However, you can include the entire unreimbursed amount you paid for medical expenses. State tax returns Example. State tax returns You and your three brothers each provide one-fourth of your mother's total support. State tax returns Under a multiple support agreement, you treat your mother as your dependent. State tax returns You paid all of her medical expenses. State tax returns Your brothers repaid you for three-fourths of these expenses. State tax returns In figuring your medical expense deduction, you can include only one-fourth of your mother's medical expenses. State tax returns Your brothers cannot include any part of the expenses. State tax returns However, if you and your brothers share the nonmedical support items and you separately pay all of your mother's medical expenses, you can include the unreimbursed amount you paid for her medical expenses in your medical expenses. State tax returns Decedent Medical expenses paid before death by the decedent are included in figuring any deduction for medical and dental expenses on the decedent's final income tax return. State tax returns This includes expenses for the decedent's spouse and dependents as well as for the decedent. State tax returns The survivor or personal representative of a decedent can choose to treat certain expenses paid by the decedent's estate for the decedent's medical care as paid by the decedent at the time the medical services were provided. State tax returns The expenses must be paid within the 1-year period beginning with the day after the date of death. State tax returns If you are the survivor or personal representative making this choice, you must attach a statement to the decedent's Form 1040 (or the decedent's amended return, Form 1040X) saying that the expenses have not been and will not be claimed on the estate tax return. State tax returns Qualified medical expenses paid before death by the decedent are not deductible if paid with a tax-free distribution from any Archer MSA, Medicare Advantage MSA, or health savings account. State tax returns What if the decedent's return had been filed and the medical expenses were not included?   Form 1040X can be filed for the year or years the expenses are treated as paid, unless the period for filing an amended return for that year has passed. State tax returns Generally, an amended return must be filed within 3 years of the date the original return was filed, or within 2 years from the time the tax was paid, whichever date is later. State tax returns Example. State tax returns John properly filed his 2012 income tax return. State tax returns He died in 2013 with unpaid medical expenses of $1,500 from 2012 and $1,800 in 2013. State tax returns If the expenses are paid within the 1-year period, his survivor or personal representative can file an amended return for 2012 claiming a deduction based on the $1,500 medical expenses. State tax returns The $1,800 of medical expenses from 2013 can be included on the decedent's final return for 2013. State tax returns What if you pay medical expenses of a deceased spouse or dependent?   If you paid medical expenses for your deceased spouse or dependent, include them as medical expenses on your Form 1040 in the year paid, whether they are paid before or after the decedent's death. State tax returns The expenses can be included if the person was your spouse or dependent either at the time the medical services were provided or at the time you paid the expenses. State tax returns What Medical Expenses Are Includible? Following is a list of items that you can include in figuring your medical expense deduction. State tax returns The items are listed in alphabetical order. State tax returns This list does not include all possible medical expenses. State tax returns To determine if an expense not listed can be included in figuring your medical expense deduction, see What Are Medical Expenses , earlier. State tax returns Abortion You can include in medical expenses the amount you pay for a legal abortion. State tax returns Acupuncture You can include in medical expenses the amount you pay for acupuncture. State tax returns Alcoholism You can include in medical expenses amounts you pay for an inpatient's treatment at a therapeutic center for alcohol addiction. State tax returns This includes meals and lodging provided by the center during treatment. State tax returns You can also include in medical expenses amounts you pay for transportation to and from Alcoholics Anonymous meetings in your community if the attendance is pursuant to medical advice that membership in Alcoholics Anonymous is necessary for the treatment of a disease involving the excessive use of alcoholic liquors. State tax returns Ambulance You can include in medical expenses amounts you pay for ambulance service. State tax returns Annual Physical Examination See Physical Examination , later. State tax returns Artificial Limb You can include in medical expenses the amount you pay for an artificial limb. State tax returns Artificial Teeth You can include in medical expenses the amount you pay for artificial teeth. State tax returns Bandages You can include in medical expenses the cost of medical supplies such as bandages. State tax returns Birth Control Pills You can include in medical expenses the amount you pay for birth control pills prescribed by a doctor. State tax returns Body Scan You can include in medical expenses the cost of an electronic body scan. State tax returns Braille Books and Magazines You can include in medical expenses the part of the cost of Braille books and magazines for use by a visually impaired person that is more than the cost of regular printed editions. State tax returns Breast Pumps and Supplies You can include in medical expenses the cost of breast pumps and supplies that assist lactation. State tax returns Breast Reconstruction Surgery You can include in medical expenses the amounts you pay for breast reconstruction surgery, as well as breast prosthesis, following a mastectomy for cancer. State tax returns See Cosmetic Surgery , later. State tax returns Capital Expenses You can include in medical expenses amounts you pay for special equipment installed in a home, or for improvements, if their main purpose is medical care for you, your spouse, or your dependent. State tax returns The cost of permanent improvements that increase the value of your property may be partly included as a medical expense. State tax returns The cost of the improvement is reduced by the increase in the value of your property. State tax returns The difference is a medical expense. State tax returns If the value of your property is not increased by the improvement, the entire cost is included as a medical expense. State tax returns Certain improvements made to accommodate a home to your disabled condition, or that of your spouse or your dependents who live with you, do not usually increase the value of the home and the cost can be included in full as medical expenses. State tax returns These improvements include, but are not limited to, the following items. State tax returns Constructing entrance or exit ramps for your home. State tax returns Widening doorways at entrances or exits to your home. State tax returns Widening or otherwise modifying hallways and interior doorways. State tax returns Installing railings, support bars, or other modifications to bathrooms. State tax returns Lowering or modifying kitchen cabinets and equipment. State tax returns Moving or modifying electrical outlets and fixtures. State tax returns Installing porch lifts and other forms of lifts (but elevators generally add value to the house). State tax returns Modifying fire alarms, smoke detectors, and other warning systems. State tax returns Modifying stairways. State tax returns Adding handrails or grab bars anywhere (whether or not in bathrooms). State tax returns Modifying hardware on doors. State tax returns Modifying areas in front of entrance and exit doorways. State tax returns Grading the ground to provide access to the residence. State tax returns Only reasonable costs to accommodate a home to a disabled condition are considered medical care. State tax returns Additional costs for personal motives, such as for architectural or aesthetic reasons, are not medical expenses. State tax returns Capital expense worksheet. State tax returns   Use Worksheet A to figure the amount of your capital expense to include in your medical expenses. State tax returns Worksheet A. State tax returns Capital Expense Worksheet Instructions: Use this worksheet to figure the amount, if any, of your medical expenses due to a home improvement. State tax returns 1. State tax returns Enter the amount you paid for the home improvement 1. State tax returns   2. State tax returns Enter the value of your home immediately after the improvement 2. State tax returns       3. State tax returns Enter the value of your home immediately before the improvement 3. State tax returns       4. State tax returns Subtract line 3 from line 2. State tax returns This is the increase in the value of your home due to the improvement 4. State tax returns     • If line 4 is more than or equal to line 1, you have no medical expenses due to the home improvement; stop here. State tax returns       • If line 4 is less than line 1, go to line 5. State tax returns     5. State tax returns Subtract line 4 from line 1. State tax returns These are your medical expenses due to the home improvement 5. State tax returns   Operation and upkeep. State tax returns   Amounts you pay for operation and upkeep of a capital asset qualify as medical expenses, as long as the main reason for them is medical care. State tax returns This rule applies even if none or only part of the original cost of the capital asset qualified as a medical care expense. State tax returns Improvements to property rented by a person with a disability. State tax returns   Amounts paid to buy and install special plumbing fixtures for a person with a disability, mainly for medical reasons, in a rented house are medical expenses. State tax returns Example. State tax returns John has arthritis and a heart condition. State tax returns He cannot climb stairs or get into a bathtub. State tax returns On his doctor's advice, he installs a bathroom with a shower stall on the first floor of his two-story rented house. State tax returns The landlord did not pay any of the cost of buying and installing the special plumbing and did not lower the rent. State tax returns John can include in medical expenses the entire amount he paid. State tax returns Car You can include in medical expenses the cost of special hand controls and other special equipment installed in a car for the use of a person with a disability. State tax returns Special design. State tax returns   You can include in medical expenses the difference between the cost of a regular car and a car specially designed to hold a wheelchair. State tax returns Cost of operation. State tax returns   The includible costs of using a car for medical reasons are explained under Transportation , later. State tax returns Chiropractor You can include in medical expenses fees you pay to a chiropractor for medical care. State tax returns Christian Science Practitioner You can include in medical expenses fees you pay to Christian Science practitioners for medical care. State tax returns Contact Lenses You can include in medical expenses amounts you pay for contact lenses needed for medical reasons. State tax returns You can also include the cost of equipment and materials required for using contact lenses, such as saline solution and enzyme cleaner. State tax returns See Eyeglasses and Eye Surgery , later. State tax returns Crutches You can include in medical expenses the amount you pay to buy or rent crutches. State tax returns Dental Treatment You can include in medical expenses the amounts you pay for the prevention and alleviation of dental disease. State tax returns Preventive treatment includes the services of a dental hygienist or dentist for such procedures as teeth cleaning, the application of sealants, and fluoride treatments to prevent tooth decay. State tax returns Treatment to alleviate dental disease include services of a dentist for procedures such as X-rays, fillings, braces, extractions, dentures, and other dental ailments. State tax returns But see Teeth Whitening under What Expenses Are Not Includible, later. State tax returns Diagnostic Devices You can include in medical expenses the cost of devices used in diagnosing and treating illness and disease. State tax returns Example. State tax returns You have diabetes and use a blood sugar test kit to monitor your blood sugar level. State tax returns You can include the cost of the blood sugar test kit in your medical expenses. State tax returns Disabled Dependent Care Expenses Some disabled dependent care expenses may qualify as either: Medical expenses, or Work-related expenses for purposes of taking a credit for dependent care. State tax returns (See Publication 503, Child and Dependent Care Expenses. State tax returns ) You can choose to apply them either way as long as you do not use the same expenses to claim both a credit and a medical expense deduction. State tax returns Drug Addiction You can include in medical expenses amounts you pay for an inpatient's treatment at a therapeutic center for drug addiction. State tax returns This includes meals and lodging at the center during treatment. State tax returns Drugs See Medicines , later. State tax returns Eye Exam You can include in medical expenses the amount you pay for eye examinations. State tax returns Eyeglasses You can include in medical expenses amounts you pay for eyeglasses and contact lenses needed for medical reasons. State tax returns See Contact Lenses , earlier, for more information. State tax returns Eye Surgery You can include in medical expenses the amount you pay for eye surgery to treat defective vision, such as laser eye surgery or radial keratotomy. State tax returns Fertility Enhancement You can include in medical expenses the cost of the following procedures to overcome an inability to have children. State tax returns Procedures such as in vitro fertilization (including temporary storage of eggs or sperm). State tax returns Surgery, including an operation to reverse prior surgery that prevented the person operated on from having children. State tax returns Founder's Fee See Lifetime Care—Advance Payments , later. State tax returns Guide Dog or Other Service Animal You can include in medical expenses the costs of buying, training, and maintaining a guide dog or other service animal to assist a visually impaired or hearing disabled person, or a person with other physical disabilities. State tax returns In general, this includes any costs, such as food, grooming, and veterinary care, incurred in maintaining the health and vitality of the service animal so that it may perform its duties. State tax returns Health Institute You can include in medical expenses fees you pay for treatment at a health institute only if the treatment is prescribed by a physician and the physician issues a statement that the treatment is necessary to alleviate a physical or mental defect or illness of the individual receiving the treatment. State tax returns Health Maintenance Organization (HMO) You can include in medical expenses amounts you pay to entitle you, your spouse, or a dependent to receive medical care from an HMO. State tax returns These amounts are treated as medical insurance premiums. State tax returns See Insurance Premiums , later. State tax returns Hearing Aids You can include in medical expenses the cost of a hearing aid and batteries, repairs, and maintenance needed to operate it. State tax returns Home Care See Nursing Services , later. State tax returns Home Improvements See Capital Expenses , earlier. State tax returns Hospital Services You can include in medical expenses amounts you pay for the cost of inpatient care at a hospital or similar institution if a principal reason for being there is to receive medical care. State tax returns This includes amounts paid for meals and lodging. State tax returns Also see Lodging , later. State tax returns Insurance Premiums You can include in medical expenses insurance premiums you pay for policies that cover medical care. State tax returns Medical care policies can provide payment for treatment that includes: Hospitalization, surgical services, X-rays, Prescription drugs and insulin, Dental care, Replacement of lost or damaged contact lenses, and Long-term care (subject to additional limitations). State tax returns See Qualified Long-Term Care Insurance Contracts under Long-Term Care, later. State tax returns If you have a policy that provides payments for other than medical care, you can include the premiums for the medical care part of the policy if the charge for the medical part is reasonable. State tax returns The cost of the medical part must be separately stated in the insurance contract or given to you in a separate statement. State tax returns Health coverage tax credit. State tax returns   If, during 2013, you were an eligible trade adjustment assistance (TAA) recipient, alternative TAA (ATAA) recipient, reemployment TAA (RTAA) recipient, or Pension Benefit Guaranty Corporation (PBGC) pension recipient, you must complete Form 8885 before completing Schedule A. State tax returns When figuring the amount of insurance premiums you can deduct on Schedule A, do not include: Any amounts you included on Form 8885, Any qualified health insurance premiums you paid to “U. State tax returns S. State tax returns Treasury–HCTC,” or Any health coverage tax credit advance payments shown on Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments. State tax returns Employer-Sponsored Health Insurance Plan Do not include in your medical and dental expenses any insurance premiums paid by an employer-sponsored health insurance plan unless the premiums are included on your Form W-2, Wage and Tax Statement. State tax returns Also, do not include any other medical and dental expenses paid by the plan unless the amount paid is included on your Form W-2. State tax returns Example. State tax returns You are a federal employee participating in the premium conversion plan of the Federal Employee Health Benefits (FEHB) program. State tax returns Your share of the FEHB premium is paid by making a pre-tax reduction in your salary. State tax returns Because you are an employee whose insurance premiums are paid with money that is never included in your gross income, you cannot deduct the premiums paid with that money. State tax returns Long-term care services. State tax returns   Contributions made by your employer to provide coverage for qualified long-term care services under a flexible spending or similar arrangement must be included in your income. State tax returns This amount will be reported as wages on your Form W-2. State tax returns Retired public safety officers. State tax returns   If you are a retired public safety officer, do not include as medical expenses any health or long-term care insurance premiums that you elected to have paid with tax-free distributions from a retirement plan. State tax returns This applies only to distributions that would otherwise be included in income. State tax returns Health reimbursement arrangement (HRA). State tax returns   If you have medical expenses that are reimbursed by a health reimbursement arrangement, you cannot include those expenses in your medical expenses. State tax returns This is because an HRA is funded solely by the employer. State tax returns Medicare A If you are covered under social security (or if you are a government employee who paid Medicare tax), you are enrolled in Medicare A. State tax returns The payroll tax paid for Medicare A is not a medical expense. State tax returns If you are not covered under social security (or were not a government employee who paid Medicare tax), you can voluntarily enroll in Medicare A. State tax returns In this situation you can include the premiums you paid for Medicare A as a medical expense. State tax returns Medicare B Medicare B is a supplemental medical insurance. State tax returns Premiums you pay for Medicare B are a medical expense. State tax returns Check the information you received from the Social Security Administration to find out your premium. State tax returns Medicare D Medicare D is a voluntary prescription drug insurance program for persons with Medicare A or B. State tax returns You can include as a medical expense premiums you pay for Medicare D. State tax returns Prepaid Insurance Premiums Premiums you pay before you are age 65 for insurance for medical care for yourself, your spouse, or your dependents after you reach age 65 are medical care expenses in the year paid if they are: Payable in equal yearly installments or more often, and Payable for at least 10 years, or until you reach age 65 (but not for less than 5 years). State tax returns Unused Sick Leave Used To Pay Premiums You must include in gross income cash payments you receive at the time of retirement for unused sick leave. State tax returns You also must include in gross income the value of unused sick leave that, at your option, your employer applies to the cost of your continuing participation in your employer's health plan after you retire. State tax returns You can include this cost of continuing participation in the health plan as a medical expense. State tax returns If you participate in a health plan where your employer automatically applies the value of unused sick leave to the cost of your continuing participation in the health plan (and you do not have the option to receive cash), do not include the value of the unused sick leave in gross income. State tax returns You cannot include this cost of continuing participation in that health plan as a medical expense. State tax returns Insurance Premiums You Cannot Include You cannot include premiums you pay for: Life insurance policies, Policies providing payment for loss of earnings, Policies for loss of life, limb, sight, etc. State tax returns , Policies that pay you a guaranteed amount each week for a stated number of weeks if you are hospitalized for sickness or injury, The part of your car insurance that provides medical insurance coverage for all persons injured in or by your car because the part of the premium providing insurance for you, your spouse, and your dependents is not stated separately from the part of the premium providing insurance for medical care for others, or Health or long-term care insurance if you elected to pay these premiums with tax-free distributions from a retirement plan made directly to the insurance provider and these distributions would otherwise have been included in income. State tax returns Taxes imposed by any governmental unit, such as Medicare taxes, are not insurance premiums. State tax returns Coverage for nondependents. State tax returns   Generally, you cannot deduct any additional premium you pay as the result of including on your policy someone who is not your spouse or dependent, even if that person is your child under age 27. State tax returns However, you can deduct the additional premium if that person is: Your child whom you do not claim as a dependent because of the rules for children of divorced or separated parents, Any person you could have claimed as a dependent on your return except that person received $3,900 or more of gross income or filed a joint return, or Any person you could have claimed as a dependent except that you, or your spouse if filing jointly, can be claimed as a dependent on someone else's 2013 return. State tax returns  Also, if you had family coverage when you added this individual to your policy and your premiums did not increase, you can enter on Schedule A (Form 1040) the full amount of your medical and dental insurance premiums. State tax returns Intellectually and Developmentally Disabled, Special Home for You can include in medical expenses the cost of keeping a person who is intellectually and developmentally disabled in a special home, not the home of a relative, on the recommendation of a psychiatrist to help the person adjust from life in a mental hospital to community living. State tax returns Laboratory Fees You can include in medical expenses the amounts you pay for laboratory fees that are part of medical care. State tax returns Lactation Expenses See Breast Pumps and Supplies , earlier. State tax returns Lead-Based Paint Removal You can include in medical expenses the cost of removing lead-based paints from surfaces in your home to prevent a child who has or had lead poisoning from eating the paint. State tax returns These surfaces must be in poor repair (peeling or cracking) or within the child's reach. State tax returns The cost of repainting the scraped area is not a medical expense. State tax returns If, instead of removing the paint, you cover the area with wallboard or paneling, treat these items as capital expenses. State tax returns See Capital Expenses , earlier. State tax returns Do not include the cost of painting the wallboard as a medical expense. State tax returns Learning Disability See Special Education , later. State tax returns Legal Fees You can include in medical expenses legal fees you paid that are necessary to authorize treatment for mental illness. State tax returns However, you cannot include in medical expenses fees for the management of a guardianship estate, fees for conducting the affairs of the person being treated, or other fees that are not necessary for medical care. State tax returns Lifetime Care—Advance Payments You can include in medical expenses a part of a life-care fee or “founder's fee” you pay either monthly or as a lump sum under an agreement with a retirement home. State tax returns The part of the payment you include is the amount properly allocable to medical care. State tax returns The agreement must require that you pay a specific fee as a condition for the home's promise to provide lifetime care that includes medical care. State tax returns You can use a statement from the retirement home to prove the amount properly allocable to medical care. State tax returns The statement must be based either on the home's prior experience or on information from a comparable home. State tax returns Dependents with disabilities. State tax returns   You can include in medical expenses advance payments to a private institution for lifetime care, treatment, and training of your physically or mentally impaired child upon your death or when you become unable to provide care. State tax returns The payments must be a condition for the institution's future acceptance of your child and must not be refundable. State tax returns Payments for future medical care. State tax returns   Generally, you cannot include in medical expenses current payments for medical care (including medical insurance) to be provided substantially beyond the end of the year. State tax returns This rule does not apply in situations where the future care is purchased in connection with obtaining lifetime care of the type described earlier. State tax returns Lodging You can include in medical expenses the cost of meals and lodging at a hospital or similar institution if a principal reason for being there is to receive medical care. State tax returns See Nursing Home , later. State tax returns You may be able to include in medical expenses the cost of lodging not provided in a hospital or similar institution. State tax returns You can include the cost of such lodging while away from home if all of the following requirements are met. State tax returns The lodging is primarily for and essential to medical care. State tax returns The medical care is provided by a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital. State tax returns The lodging is not lavish or extravagant under the circumstances. State tax returns There is no significant element of personal pleasure, recreation, or vacation in the travel away from home. State tax returns The amount you include in medical expenses for lodging cannot be more than $50 for each night for each person. State tax returns You can include lodging for a person traveling with the person receiving the medical care. State tax returns For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. State tax returns Meals are not included. State tax returns Do not include the cost of lodging while away from home for medical treatment if that treatment is not received from a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital or if that lodging is not primarily for or essential to the medical care received. State tax returns Long-Term Care You can include in medical expenses amounts paid for qualified long-term care services and premiums paid for qualified long-term care insurance contracts. State tax returns Qualified Long-Term Care Services Qualified long-term care services are necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services (defined later) that are: Required by a chronically ill individual, and Provided pursuant to a plan of care prescribed by a licensed health care practitioner. State tax returns Chronically ill individual. State tax returns   An individual is chronically ill if, within the previous 12 months, a licensed health care practitioner has certified that the individual meets either of the following descriptions. State tax returns He or she is unable to perform at least two activities of daily living without substantial assistance from another individual for at least 90 days, due to a loss of functional capacity. State tax returns Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence. State tax returns He or she requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. State tax returns Maintenance and personal care services. State tax returns    Maintenance or personal care services is care which has as its primary purpose the providing of a chronically ill individual with needed assistance with his or her disabilities (including protection from threats to health and safety due to severe cognitive impairment). State tax returns Qualified Long-Term Care Insurance Contracts A qualified long-term care insurance contract is an insurance contract that provides only coverage of qualified long-term care services. State tax returns The contract must: Be guaranteed renewable, Not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed, Provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract must be used only to reduce future premiums or increase future benefits, and Generally not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer, or the contract makes per diem or other periodic payments without regard to expenses. State tax returns The amount of qualified long-term care premiums you can include is limited. State tax returns You can include the following as medical expenses on Schedule A (Form 1040). State tax returns Qualified long-term care premiums up to the following amounts. State tax returns Age 40 or under – $360. State tax returns Age 41 to 50 – $680. State tax returns Age 51 to 60 – $1,360. State tax returns Age 61 to 70 – $3,640. State tax returns Age 71 or over – $4,550. State tax returns Unreimbursed expenses for qualified long-term care services. State tax returns Note. State tax returns The limit on premiums is for each person. State tax returns Also, if you are an eligible retired public safety officer, you cannot include premiums for long-term care insurance if you elected to pay these premiums with tax-free distributions from a qualified retirement plan made directly to the insurance provider and these distributions would otherwise have been included in your income. State tax returns Meals You can include in medical expenses the cost of meals at a hospital or similar institution if a principal reason for being there is to get medical care. State tax returns You cannot include in medical expenses the cost of meals that are not part of inpatient care. State tax returns Also see Weight-Loss Program and Nutritional Supplements , later. State tax returns Medical Conferences You can include in medical expenses amounts paid for admission and transportation to a medical conference if the medical conference concerns the chronic illness of yourself, your spouse, or your dependent. State tax returns The costs of the medical conference must be primarily for and necessary to the medical care of you, your spouse, or your dependent. State tax returns The majority of the time spent at the conference must be spent attending sessions on medical information. State tax returns The cost of meals and lodging while attending the conference is not deductible as a medical expense. State tax returns Medical Information Plan You can include in medical expenses amounts paid to a plan that keeps medical information in a computer data bank and retrieves and furnishes the information upon request to an attending physician. State tax returns Medicines You can include in medical expenses amounts you pay for prescribed medicines and drugs. State tax returns A prescribed drug is one that requires a prescription by a doctor for its use by an individual. State tax returns You can also include amounts you pay for insulin. State tax returns Except for insulin, you cannot include in medical expenses amounts you pay for a drug that is not prescribed. State tax returns Imported medicines and drugs. State tax returns   If you imported medicines or drugs from other countries, see Medicines and Drugs From Other Countries , under What Expenses Are Not Includible, later. State tax returns Nursing Home You can include in medical expenses the cost of medical care in a nursing home, home for the aged, or similar institution, for yourself, your spouse, or your dependents. State tax returns This includes the cost of meals and lodging in the home if a principal reason for being there is to get medical care. State tax returns Do not include the cost of meals and lodging if the reason for being in the home is personal. State tax returns You can, however, include in medical expenses the part of the cost that is for medical or nursing care. State tax returns Nursing Services You can include in medical expenses wages and other amounts you pay for nursing services. State tax returns The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. State tax returns This includes services connected with caring for the patient's condition, such as giving medication or changing dressings, as well as bathing and grooming the patient. State tax returns These services can be provided in your home or another care facility. State tax returns Generally, only the amount spent for nursing services is a medical expense. State tax returns If the attendant also provides personal and household services, amounts paid to the attendant must be divided between the time spent performing household and personal services and the time spent for nursing services. State tax returns For example, because of your medical condition you pay a visiting nurse $300 per week for medical and household services. State tax returns She spends 10% of her time doing household services such as washing dishes and laundry. State tax returns You can include only $270 per week as medical expenses. State tax returns The $30 (10% × $300) allocated to household services cannot be included. State tax returns However, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. State tax returns See Maintenance and personal care services under Long-Term Care, earlier. State tax returns Additionally, certain expenses for household services or for the care of a qualifying individual incurred to allow you to work may qualify for the child and dependent care credit. State tax returns See Publication 503. State tax returns You can also include in medical expenses part of the amount you pay for that attendant's meals. State tax returns Divide the food expense among the household members to find the cost of the attendant's food. State tax returns Then divide that cost in the same manner as in the preceding paragraph. State tax returns If you had to pay additional amounts for household upkeep because of the attendant, you can include the extra amounts with your medical expenses. State tax returns This includes extra rent or utilities you pay because you moved to a larger apartment to provide space for the attendant. State tax returns Employment taxes. State tax returns   You can include as a medical expense social security tax, FUTA, Medicare tax, and state employment taxes you pay for an attendant who provides medical care. State tax returns If the attendant also provides personal and household services, you can include as a medical expense only the amount of employment taxes paid for medical services as explained earlier. State tax returns For information on employment tax responsibilities of household employers, see Publication 926, Household Employer's Tax Guide. State tax returns Operations You can include in medical expenses amounts you pay for legal operations that are not for unnecessary cosmetic surgery. State tax returns See Cosmetic Surgery under What Expenses Are Not Includible, later. State tax returns Optometrist See Eyeglasses , earlier. State tax returns Organ Donors See Transplants , later. State tax returns Osteopath You can include in medical expenses amounts you pay to an osteopath for medical care. State tax returns Oxygen You can include in medical expenses amounts you pay for oxygen and oxygen equipment to relieve breathing problems caused by a medical condition. State tax returns Physical Examination You can include in medical expenses the amount you pay for an annual physical examination and diagnostic tests by a physician. State tax returns You do not have to be ill at the time of the examination. State tax returns Pregnancy Test Kit You can include in medical expenses the amount you pay to purchase a pregnancy test kit to determine if you are pregnant. State tax returns Prosthesis See Artificial Limb and Breast Reconstruction Surgery , earlier. State tax returns Psychiatric Care You can include in medical expenses amounts you pay for psychiatric care. State tax returns This includes the cost of supporting a mentally ill dependent at a specially equipped medical center where the dependent receives medical care. State tax returns See Psychoanalysis, next, and Transportation , later. State tax returns Psychoanalysis You can include in medical expenses payments for psychoanalysis. State tax returns However, you cannot include payments for psychoanalysis that is part of required training to be a psychoanalyst. State tax returns Psychologist You can include in medical expenses amounts you pay to a psychologist for medical care. State tax returns Special Education You can include in medical expenses fees you pay on a doctor's recommendation for a child's tutoring by a teacher who is specially trained and qualified to work with children who have learning disabilities caused by mental or physical impairments, including nervous system disorders. State tax returns You can include in medical expenses the cost (tuition, meals, and lodging) of attending a school that furnishes special education to help a child to overcome learning disabilities. State tax returns A doctor must recommend that the child attend the school. State tax returns Overcoming the learning disabilities must be a principal reason for attending the school, and any ordinary education received must be incidental to the special education provided. State tax returns Special education includes: Teaching Braille to a visually impaired person, Teaching lip reading to a hearing disabled person, or Giving remedial language training to correct a condition caused by a birth defect. State tax returns Sterilization You can include in medical expenses the cost of a legal sterilization (a legally performed operation to make a person unable to have children). State tax returns Also see Vasectomy , later. State tax returns Stop-Smoking Programs You can include in medical expenses amounts you pay for a program to stop smoking. State tax returns However, you cannot include in medical expenses amounts you pay for drugs that do not require a prescription, such as nicotine gum or patches, that are designed to help stop smoking. State tax returns Surgery See Operations , earlier. State tax returns Telephone You can include in medical expenses the cost of special telephone equipment that lets a person who is deaf, hard of hearing or has a speech disability communicate over a regular telephone. State tax returns This includes teletypewriter (TTY) and telecommunications device for the deaf (TDD) equipment. State tax returns You can also include the cost of repairing the equipment. State tax returns Television You can include in medical expenses the cost of equipment that displays the audio part of television programs as subtitles for persons with a hearing disability. State tax returns This may be the cost of an adapter that attaches to a regular set. State tax returns It also may be the part of the cost of a specially equipped television that exceeds the cost of the same model regular television set. State tax returns Therapy You can include in medical expenses amounts you pay for therapy received as medical treatment. State tax returns Transplants You can include in medical expenses amounts paid for medical care you receive because you are a donor or a possible donor of a kidney or other organ. State tax returns This includes transportation. State tax returns You can include any expenses you pay for the medical care of a donor in connection with the donating of an organ. State tax returns This includes transportation. State tax returns Transportation You can include in medical expenses amounts paid for transportation primarily for, and essential to, medical care. State tax returns You can include:    Bus, taxi, train, or plane fares or ambulance service, Transportation expenses of a parent who must go with a child who needs medical care, Transportation expenses of a nurse or other person who can give injections, medications, or other treatment required by a patient who is traveling to get medical care and is unable to travel alone, and Transportation expenses for regular visits to see a mentally ill dependent, if these visits are recommended as a part of treatment. State tax returns Car expenses. State tax returns   You can include out-of-pocket expenses, such as the cost of gas and oil, when you use a car for medical reasons. State tax returns You cannot include depreciation, insurance, general repair, or maintenance expenses. State tax returns   If you do not want to use your actual expenses for 2013, you can use the standard medical mileage rate of 24 cents a mile. State tax returns    You can also include parking fees and tolls. State tax returns You can add these fees and tolls to your medical expenses whether you use actual expenses or the standard mileage rate. State tax returns Example. State tax returns In 2013, Bill Jones drove 2,800 miles for medical reasons. State tax returns He spent $500 for gas, $30 for oil, and $100 for tolls and parking. State tax returns He wants to figure the amount he can include in medical expenses both ways to see which gives him the greater deduction. State tax returns He figures the actual expenses first. State tax returns He adds the $500 for gas, the $30 for oil, and the $100 for tolls and parking for a total of $630. State tax returns He then figures the standard mileage amount. State tax returns He multiplies 2,800 miles by 24 cents a mile for a total of $672. State tax returns He then adds the $100 tolls and parking for a total of $772. State tax returns Bill includes the $772 of car expenses with his other medical expenses for the year because the $772 is more than the $630 he figured using actual expenses. State tax returns Transportation expenses you cannot include. State tax returns    You cannot include in medical expenses the cost of transportation in the following situations. State tax returns Going to and from work, even if your condition requires an unusual means of transportation. State tax returns Travel for purely personal reasons to another city for an operation or other medical care. State tax returns Travel that is merely for the general improvement of one's health. State tax returns The costs of operating a specially equipped car for other than medical reasons. State tax returns Trips You can include in medical expenses amounts you pay for transportation to another city if the trip is primarily for, and essential to, receiving medical services. State tax returns You may be able to include up to $50 for each night for each person. State tax returns You can include lodging for a person traveling with the person receiving the medical care. State tax returns For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. State tax returns Meals are not included. State tax returns See Lodging , earlier. State tax returns You cannot include in medical expenses a trip or vacation taken merely for a change in environment, improvement of morale, or general improvement of health, even if the trip is made on the advice of a doctor. State tax returns However, see Medical Conferences , earlier. State tax returns Tuition Under special circumstances, you can include charges for tuition in medical expenses. State tax returns See Special Education , earlier. State tax returns You can include charges for a health plan included in a lump-sum tuition fee if the charges are separately stated or can easily be obtained from the school. State tax returns Vasectomy You can include in medical expenses the amount you pay for a vasectomy. State tax returns Vision Correction Surgery See Eye Surgery , earlier. State tax returns Weight-Loss Program You can include in medical expenses amounts you pay to lose weight if it is a treatment for a specific disease diagnosed by a physician (such as obesity, hypertension, or heart disease). State tax returns This includes fees you pay for membership in a weight reduction group as well as fees for attendance at periodic meetings. State tax returns You cannot include membership dues in a gym, health club, or spa as medical expenses, but you can include separate fees charged there for weight loss activities. State tax returns You cannot include the cost of diet food or beverages in medical expenses because the diet food and beverages substitute for what is normally consumed to satisfy nutritional needs. State tax returns You can include the cost of special food in medical expenses only if: The food does not satisfy normal nutritional needs, The food alleviates or treats an illness, and The need for the food is substantiated by a physician. State tax returns The amount you can include in medical expenses is limited to the amount by which the cost of the special food exceeds the cost of a normal diet. State tax returns See also Weight-Loss Program under What Expenses Are Not Includible, later. State tax returns Wheelchair You can include in medical expenses amounts you pay for a wheelchair used mainly for the relief of sickness or disability, and not just to provide transportation to and from work. State tax returns The cost of operating and maintaining the wheelchair is also a medical expense. State tax returns Wig You can include in medical expenses the cost of a wig purchased upon the advice of a physician for the mental health of a patient who has lost all of his or her hair from disease. State tax returns X-ray You can include in medical expenses amounts you pay for X-rays for medical reasons. State tax returns What Expenses Are Not Includible? Following is a list of some items that you cannot include in figuring your medical expense deduction. State tax returns The items are listed in alphabetical order. State tax returns Baby Sitting, Childcare, and Nursing Services for a Normal, Healthy Baby You cannot include in medical expenses amounts you pay for the care of children, even if the expenses enable you, your spouse, or your dependent to get medical or dental treatment. State tax returns Also, any expense allowed as a childcare credit cannot be treated as an expense paid for medical care. State tax returns Controlled Substances You cannot include in medical expenses amounts you pay for controlled substances (such as marijuana, laetrile, etc. State tax returns ), even if such substances are legalized by state law. State tax returns Such substances are not legal under federal law and cannot be included in medical expenses. State tax returns Cosmetic Surgery Generally, you cannot include in medical expenses the amount you pay for unnecessary cosmetic surgery. State tax returns This includes any procedure that is directed at improving the patient's appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease. State tax returns You generally cannot include in medical expenses the amount you pay for procedures such as face lifts, hair transplants, hair removal (electrolysis), and liposuction. State tax returns You can include in medical expenses the amount you pay for cosmetic surgery if it is necessary to improve a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease. State tax returns Example. State tax returns An individual undergoes surgery that removes a breast as part of treatment for cancer. State tax returns She pays a surgeon to reconstruct the breast. State tax returns The surgery to reconstruct the breast corrects a deformity directly related to the disease. State tax returns The cost of the surgery is includible in her medical expenses. State tax returns Dancing Lessons You cannot include in medical expenses the cost of dancing lessons, swimming lessons, etc. State tax returns , even if they are recommended by a doctor, if they are only for the improvement of general health. State tax returns Diaper Service You cannot include in medical expenses the amount you pay for diapers or diaper services, unless they are needed to relieve the effects of a particular disease. State tax returns Electrolysis or Hair Removal See Cosmetic Surgery , earlier. State tax returns Flexible Spending Account You cannot include in medical expenses amounts for which you are fully reimbursed by your flexible spending account if you contribute a part of your income on a pre-tax basis to pay for the qualified benefit. State tax returns Funeral Expenses You cannot include in medical expenses amounts you pay for funerals. State tax returns Future Medical Care Generally, you cannot include in medical expenses current payments for medical care (including medical insurance) to be provided substantially beyond the end of the year. State tax returns This rule does not apply in situations where the future care is purchased in connection with obtaining lifetime care or long-term care of the type described at Lifetime Care—Advance Payments or Long-Term Care, earlier under What Medical Expenses Are Includible. State tax returns Hair Transplant See Cosmetic Surgery , earlier. State tax returns Health Club Dues You cannot include in medical expenses health club dues or amounts paid to improve one's general health or to relieve physical or mental discomfort not related to a particular medical condition. State tax returns You cannot include in medical expenses the cost of membership in any club organized for business, pleasure, recreation, or other social purpose. State tax returns Health Coverage Tax Credit You cannot include in medical expenses amounts you pay for health insurance that you use in figuring your health coverage tax credit. State tax returns For more information, see Health Coverage Tax Credit , later. State tax returns Health Savings Accounts You cannot include in medical expenses any payment or distribution for medical expenses out of a health savings account. State tax returns Contributions to health savings accounts are deducted separately. State tax returns See Publication 969. State tax returns Household Help You cannot include in medical expenses the cost of household help, even if such help is recommended by a doctor. State tax returns This is a personal expense that is not deductible. State tax returns However, you may be able to include certain expenses paid to a person providing nursing-type services. State tax returns For more information, see Nursing Services , earlier under What Medical Expenses Are Includible. State tax returns Also, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. State tax returns For more information, see Long-Term Care , earlier under What Medical Expenses Are Includible. State tax returns Illegal Operations and Treatments You cannot include in medical expenses amounts you pay for illegal operations, treatments, or controlled substances whether rendered or prescribed by licensed or unlicensed practitioners. State tax returns Insurance Premiums See Insurance Premiums under What Medical Expenses Are Includible, earlier. State tax returns Maternity Clothes You cannot include in medical expenses amounts you pay for maternity clothes. State tax returns Medical Savings Account (MSA) You cannot include in medical expenses amounts you contribute to an Archer MSA. State tax returns You cannot include expenses you pay for with a tax-free distribution from your Archer MSA. State tax returns You also cannot use other funds equal to the amount of the distribution and include the expenses. State tax returns For more information on Archer MSAs, see Publication 969. State tax returns Medicines and Drugs From Other Countries In general, you cannot include in your medical expenses the cost of a prescribed drug brought in (or ordered shipped) from another country. State tax returns You can only include the cost of a drug that was imported legally. State tax returns For example, you can include the cost of a prescribed drug the Food and Drug Administration announces can be legally imported by individuals. State tax returns You can include the cost of a prescribed drug you purchase and consume in another country if the drug is legal in both the other country and the United States. State tax returns Nonprescription Drugs and Medicines Except for insulin, you cannot include in medical expenses amounts you pay for a drug that is not prescribed. State tax returns Example. State tax returns Your doctor recommends that you take aspirin. State tax returns Because aspirin is a drug that does not require a physician's prescription, you cannot include its cost in your medical expenses. State tax returns Nutritional Supplements You cannot include in medical expenses the cost of nutritional supplements, vitamins, herbal supplements, “natural medicines,” etc. State tax returns unless they are recommended by a medical practitioner as treatment for a specific medical condition diagnosed by a physician. State tax returns Otherwise, these items are taken to maintain your ordinary good health, and are not for medical care. State tax returns Personal Use Items You cannot include in medical expenses the cost of an item ordinarily used for personal, living, or family purposes unless it is used primarily to prevent or alleviate a physical or mental defect or illness. State tax returns For example, the cost of a toothbrush and toothpaste is a nondeductible personal expense. State tax returns In order to accommodate an individual with a physical defect, you may have to purchase an item ordinarily used as a personal, living, or family item in a special form. State tax returns You can include the excess of the cost of the item in a special form over the cost of the item in normal form as a medical expense. State tax returns (See Braille Books and Magazines under What Medical Expenses Are Includible, earlier. State tax returns ) Swimming Lessons See Dancing Lessons , earlier. State tax returns Teeth Whitening You cannot include in medical expenses amounts paid to whiten teeth. State tax returns See Cosmetic Surgery , earlier. State tax returns Veterinary Fees You generally cannot include veterinary fees in your medical expenses, but see Guide Dog or Other Service Animal under What Medical Expenses Are Includible, earlier. State tax returns Weight-Loss Program You cannot include in medical expenses the cost of a weight-loss program if the purpose of the weight loss is the improvement of appearance, general health, or sense of well-being. State tax returns You cannot include amounts you pay to lose weight unless the weight loss is a treatment for a specific disease diagnosed by a physician (such as obesity, hypertension, or heart disease). State tax returns If the weight-loss treatment is not for a specific disease diagnosed by a physician, you cannot include either the fees you pay for membership in a weight reduction group or fees for attendance at periodic meetings. State tax returns Also, you cannot include membership dues in a gym, health club, or spa. State tax returns You cannot include the cost of diet food or beverages in medical expenses because the diet food and beverages substitute for what is normally consumed to satisfy nutritional needs. State tax returns See Weight-Loss Program under What Medical Expenses Are Includible, earlier. State tax returns How Do You Treat Reimbursements? You can include in medical expenses only those amounts paid during the tax year for which you received no insurance or other reimbursement. State tax returns Insurance Reimbursement You must reduce your total medical expenses for the year by all reimbursements for medical expenses that you receive from insurance or other sources during the year. State tax returns This includes payments from Medicare. State tax returns Even if a policy provides reimbursement only for certain specific medical expenses, you must use amounts you receive from that policy to reduce your total medical expenses, including those it does not reimburse. State tax returns Example. State tax returns You have insurance policies that cover your hospital and doctors' bills but not your nursing bills. State tax returns The insurance you receive for the hospital and doctors' bills is more than their charges. State tax returns In figuring your medical deduction, you must reduce the total amount you spent for medical care by the total amount of insurance you received, even if the policies do not cover some of your medical expenses. State tax returns Health reimbursement arrange
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The State Tax Returns

State tax returns 4. State tax returns   Special Situations Table of Contents Condominiums CooperativesDepreciation Property Changed to Rental UseBasis of Property Changed to Rental Use Figuring the Depreciation Deduction Renting Part of Property Not Rented for ProfitPostponing decision. State tax returns Example—Property Changed to Rental Use This chapter discusses some rental real estate activities that are subject to additional rules. State tax returns Condominiums A condominium is most often a dwelling unit in a multi-unit building, but can also take other forms, such as a townhouse or garden apartment. State tax returns If you own a condominium, you also own a share of the common elements, such as land, lobbies, elevators, and service areas. State tax returns You and the other condominium owners may pay dues or assessments to a special corporation that is organized to take care of the common elements. State tax returns Special rules apply if you rent your condominium to others. State tax returns You can deduct as rental expenses all the expenses discussed in chapters 1 and 2. State tax returns In addition, you can deduct any dues or assessments paid for maintenance of the common elements. State tax returns You cannot deduct special assessments you pay to a condominium management corporation for improvements. State tax returns However, you may be able to recover your share of the cost of any improvement by taking depreciation. State tax returns Cooperatives If you live in a cooperative, you do not own your apartment. State tax returns Instead, a corporation owns the apartments and you are a tenant-stockholder in the cooperative housing corporation. State tax returns If you rent your apartment to others, you usually can deduct, as a rental expense, all the maintenance fees you pay to the cooperative housing corporation. State tax returns In addition to the maintenance fees paid to the cooperative housing corporation, you can deduct your direct payments for repairs, upkeep, and other rental expenses, including interest paid on a loan used to buy your stock in the corporation. State tax returns Depreciation You will be depreciating your stock in the corporation rather than the apartment itself. State tax returns Figure your depreciation deduction as follows. State tax returns Figure the depreciation for all the depreciable real property owned by the corporation. State tax returns (Depreciation methods are discussed in chapter 2 of this publication and Publication 946. State tax returns ) If you bought your cooperative stock after its first offering, figure the depreciable basis of this property as follows. State tax returns Multiply your cost per share by the total number of outstanding shares. State tax returns Add to the amount figured in (a) any mortgage debt on the property on the date you bought the stock. State tax returns Subtract from the amount figured in (b) any mortgage debt that is not for the depreciable real property, such as the part for the land. State tax returns Subtract from the amount figured in (1) any depreciation for space owned by the corporation that can be rented but cannot be lived in by tenant-stockholders. State tax returns Divide the number of your shares of stock by the total number of shares outstanding, including any shares held by the corporation. State tax returns Multiply the result of (2) by the percentage you figured in (3). State tax returns This is your depreciation on the stock. State tax returns Your depreciation deduction for the year cannot be more than the part of your adjusted basis (defined in chapter 2) in the stock of the corporation that is allocable to your rental property. State tax returns Payments added to capital account. State tax returns   Payments earmarked for a capital asset or improvement, or otherwise charged to the corporation's capital account are added to the basis of your stock in the corporation. State tax returns For example, you cannot deduct a payment used to pave a community parking lot, install a new roof, or pay the principal of the corporation's mortgage. State tax returns   Treat as a capital cost the amount you were assessed for capital items. State tax returns This cannot be more than the amount by which your payments to the corporation exceeded your share of the corporation's mortgage interest and real estate taxes. State tax returns   Your share of interest and taxes is the amount the corporation elected to allocate to you, if it reasonably reflects those expenses for your apartment. State tax returns Otherwise, figure your share in the following manner. State tax returns Divide the number of your shares of stock by the total number of shares outstanding, including any shares held by the corporation. State tax returns Multiply the corporation's deductible interest by the number you figured in (1). State tax returns This is your share of the interest. State tax returns Multiply the corporation's deductible taxes by the number you figured in (1). State tax returns This is your share of the taxes. State tax returns Property Changed to Rental Use If you change your home or other property (or a part of it) to rental use at any time other than the beginning of your tax year, you must divide yearly expenses, such as taxes and insurance, between rental use and personal use. State tax returns You can deduct as rental expenses only the part of the expense that is for the part of the year the property was used or held for rental purposes. State tax returns You cannot deduct depreciation or insurance for the part of the year the property was held for personal use. State tax returns However, you can include the home mortgage interest, qualified mortgage insurance premiums, and real estate tax expenses for the part of the year the property was held for personal use as an itemized deduction on Schedule A (Form 1040). State tax returns Example. State tax returns Your tax year is the calendar year. State tax returns You moved from your home in May and started renting it out on June 1. State tax returns You can deduct as rental expenses seven-twelfths of your yearly expenses, such as taxes and insurance. State tax returns Starting with June, you can deduct as rental expenses the amounts you pay for items generally billed monthly, such as utilities. State tax returns When figuring depreciation, treat the property as placed in service on June 1. State tax returns Basis of Property Changed to Rental Use When you change property you held for personal use to rental use (for example, you rent your former home), the basis for depreciation will be the lesser of fair market value or adjusted basis on the date of conversion. State tax returns Fair market value. State tax returns   This is the price at which the property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts. State tax returns Sales of similar property, on or about the same date, may be helpful in figuring the fair market value of the property. State tax returns Figuring the basis. State tax returns   The basis for depreciation is the lesser of: The fair market value of the property on the date you changed it to rental use, or Your adjusted basis on the date of the change—that is, your original cost or other basis of the property, plus the cost of permanent additions or improvements since you acquired it, minus deductions for any casualty or theft losses claimed on earlier years' income tax returns and other decreases to basis. State tax returns For other increases and decreases to basis, see Adjusted Basis in chapter 2. State tax returns Example. State tax returns Several years ago you built your home for $140,000 on a lot that cost you $14,000. State tax returns Before changing the property to rental use this year, you added $28,000 of permanent improvements to the house and claimed a $3,500 casualty loss deduction for damage to the house. State tax returns Part of the improvements qualified for a $500 residential energy credit, which you claimed on your 2010 tax return. State tax returns Because land is not depreciable, you can only include the cost of the house when figuring the basis for depreciation. State tax returns The adjusted basis of the house at the time of the change in its use was $164,000 ($140,000 + $28,000 − $3,500 − $500). State tax returns On the date of the change in use, your property had a fair market value of $168,000, of which $21,000 was for the land and $147,000 was for the house. State tax returns The basis for depreciation on the house is the fair market value on the date of the change ($147,000), because it is less than your adjusted basis ($164,000). State tax returns Cooperatives If you change your cooperative apartment to rental use, figure your allowable depreciation as explained earlier. State tax returns (Depreciation methods are discussed in chapter 2 of this publication and Publication 946. State tax returns ) The basis of all the depreciable real property owned by the cooperative housing corporation is the smaller of the following amounts. State tax returns The fair market value of the property on the date you change your apartment to rental use. State tax returns This is considered to be the same as the corporation's adjusted basis minus straight line depreciation, unless this value is unrealistic. State tax returns The corporation's adjusted basis in the property on that date. State tax returns Do not subtract depreciation when figuring the corporation's adjusted basis. State tax returns If you bought the stock after its first offering, the corporation's adjusted basis in the property is the amount figured in (1) under Depreciation (under Cooperatives, near the beginning of this chapter). State tax returns The fair market value of the property is considered to be the same as the corporation's adjusted basis figured in this way minus straight line depreciation, unless the value is unrealistic. State tax returns Figuring the Depreciation Deduction To figure the deduction, use the depreciation system in effect when you convert your residence to rental use. State tax returns Generally, that will be MACRS for any conversion after 1986. State tax returns Treat the property as placed in service on the conversion date. State tax returns Example. State tax returns Your converted residence (see previous example under Figuring the basis) was available for rent on August 1. State tax returns Using Table 2-2d (see chapter 2), the percentage for Year 1 beginning in August is 1. State tax returns 364% and the depreciation deduction for Year 1 is $2,005 ($147,000 × . State tax returns 01364). State tax returns Renting Part of Property If you rent part of your property, you must divide certain expenses between the part of the property used for rental purposes and the part of the property used for personal purposes, as though you actually had two separate pieces of property. State tax returns You can deduct the expenses related to the part of the property used for rental purposes, such as home mortgage interest, qualified mortgage insurance premiums, and real estate taxes, as rental expenses on Schedule E (Form 1040). State tax returns You can also deduct as rental expenses a portion of other expenses that normally are nondeductible personal expenses, such as expenses for electricity, or painting the outside of the house. State tax returns There is no change in the types of expenses deductible for the personal-use part of your property. State tax returns Generally, these expenses may be deducted only if you itemize your deductions on Schedule A (Form 1040). State tax returns You cannot deduct any part of the cost of the first phone line even if your tenants have unlimited use of it. State tax returns You do not have to divide the expenses that belong only to the rental part of your property. State tax returns For example, if you paint a room that you rent, or if you pay premiums for liability insurance in connection with renting a room in your home, your entire cost is a rental expense. State tax returns If you install a second phone line strictly for your tenant's use, all of the cost of the second line is deductible as a rental expense. State tax returns You can deduct depreciation on the part of the house used for rental purposes as well as on the furniture and equipment you use for rental purposes. State tax returns How to divide expenses. State tax returns   If an expense is for both rental use and personal use, such as mortgage interest or heat for the entire house, you must divide the expense between rental use and personal use. State tax returns You can use any reasonable method for dividing the expense. State tax returns It may be reasonable to divide the cost of some items (for example, water) based on the number of people using them. State tax returns The two most common methods for dividing an expense are (1) the number of rooms in your home, and (2) the square footage of your home. State tax returns Example. State tax returns You rent a room in your house. State tax returns The room is 12 × 15 feet, or 180 square feet. State tax returns Your entire house has 1,800 square feet of floor space. State tax returns You can deduct as a rental expense 10% of any expense that must be divided between rental use and personal use. State tax returns If your heating bill for the year for the entire house was $600, $60 ($600 × . State tax returns 10) is a rental expense. State tax returns The balance, $540, is a personal expense that you cannot deduct. State tax returns Duplex. State tax returns   A common situation is the duplex where you live in one unit and rent out the other. State tax returns Certain expenses apply to the entire property, such as mortgage interest and real estate taxes, and must be split to determine rental and personal expenses. State tax returns Example. State tax returns You own a duplex and live in one half, renting the other half. State tax returns Both units are approximately the same size. State tax returns Last year, you paid a total of $10,000 mortgage interest and $2,000 real estate taxes for the entire property. State tax returns You can deduct $5,000 mortgage interest and $1,000 real estate taxes on Schedule E (Form 1040), and if you itemize your deductions, you can deduct the other $5,000 mortgage interest and $1,000 real estate taxes on Schedule A (Form 1040). State tax returns Not Rented for Profit If you do not rent your property to make a profit, you can deduct your rental expenses only up to the amount of your rental income. State tax returns You cannot deduct a loss or carry forward to the next year any rental expenses that are more than your rental income for the year. State tax returns Where to report. State tax returns   Report your not-for-profit rental income on Form 1040 or 1040NR, line 21. State tax returns For example, if you are filing Form 1040, you can include your mortgage interest and any qualified mortgage insurance premiums (if you use the property as your main home or second home), real estate taxes, and casualty losses on the appropriate lines of Schedule A (Form 1040) if you itemize your deductions. State tax returns   If you itemize your deductions, claim your other rental expenses, subject to the rules explained in chapter 1 of Publication 535, as miscellaneous itemized deductions on Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 9. State tax returns You can deduct these expenses only if they, together with certain other miscellaneous itemized deductions, total more than 2% of your adjusted gross income. State tax returns Presumption of profit. State tax returns   If your rental income is more than your rental expenses for at least 3 years out of a period of 5 consecutive years, you are presumed to be renting your property to make a profit. State tax returns Postponing decision. State tax returns   If you are starting your rental activity and do not have 3 years showing a profit, you can elect to have the presumption made after you have the 5 years of experience required by the test. State tax returns You may choose to postpone the decision of whether the rental is for profit by filing Form 5213. State tax returns You must file Form 5213 within 3 years after the due date of your return (determined without extensions) for the year in which you first carried on the activity or, if earlier, within 60 days after receiving written notice from the Internal Revenue Service proposing to disallow deductions attributable to the activity. State tax returns More information. State tax returns   For more information about the rules for an activity not engaged in for profit, see Not-for-Profit Activities in chapter 1 of Publication 535. State tax returns Example—Property Changed to Rental Use In January, Eileen Johnson bought a condominium apartment to live in. State tax returns Instead of selling the house she had been living in, she decided to change it to rental property. State tax returns Eileen selected a tenant and started renting the house on February 1. State tax returns Eileen charges $750 a month for rent and collects it herself. State tax returns Eileen also received a $750 security deposit from her tenant. State tax returns Because she plans to return it to her tenant at the end of the lease, she does not include it in her income. State tax returns Her rental expenses for the year are as follows. State tax returns   Mortgage interest $1,800     Fire insurance (1-year policy) 100     Miscellaneous repairs (after renting) 297     Real estate taxes imposed and paid 1,200   Eileen must divide the real estate taxes, mortgage interest, and fire insurance between the personal use of the property and the rental use of the property. State tax returns She can deduct eleven-twelfths of these expenses as rental expenses. State tax returns She can include the balance of the allowable taxes and mortgage interest on Schedule A (Form 1040) if she itemizes. State tax returns She cannot deduct the balance of the fire insurance because it is a personal expense. State tax returns Eileen bought this house in 1984 for $35,000. State tax returns Her property tax was based on assessed values of $10,000 for the land and $25,000 for the house. State tax returns Before changing it to rental property, Eileen added several improvements to the house. State tax returns She figures her adjusted basis as follows:   Improvements Cost     House $25,000     Remodeled kitchen 4,200     Recreation room 5,800     New roof 1,600     Patio and deck 2,400     Adjusted basis $39,000   On February 1, when Eileen changed her house to rental property, the property had a fair market value of $152,000. State tax returns Of this amount, $35,000 was for the land and $117,000 was for the house. State tax returns Because Eileen's adjusted basis is less than the fair market value on the date of the change, Eileen uses $39,000 as her basis for depreciation. State tax returns As specified for residential rental property, Eileen must use the straight line method of depreciation over the GDS or ADS recovery period. State tax returns She chooses the GDS recovery period of 27. State tax returns 5 years. State tax returns She uses Table 2-2d to find her depreciation percentage. State tax returns Since she placed the property in service in February, the percentage is 3. State tax returns 182%. State tax returns On April 1, Eileen bought a new dishwasher for the rental property at a cost of $425. State tax returns The dishwasher is personal property used in a rental real estate activity, which has a 5-year recovery period. State tax returns She uses Table 2-2a to find the percentage for Year 1 under “Half-year convention” (20%) to figure her depreciation deduction. State tax returns On May 1, Eileen paid $4,000 to have a furnace installed in the house. State tax returns The furnace is residential rental property. State tax returns Because she placed the property in service in May, the percentage from Table 2-2d is 2. State tax returns 273%. State tax returns Eileen figures her net rental income or loss for the house as follows: Total rental income received  ($750 × 11) $8,250 Minus: Expenses     Mortgage interest ($1,800 × 11/12) $1,650   Fire insurance ($100 × 11/12) 92   Miscellaneous repairs 297   Real estate taxes ($1,200 × 11/12) 1,100   Total expenses 3,139 Balance $5,111 Minus: Depreciation     House ($39,000 × . State tax returns 03182) $1,241   Dishwasher ($425 × . State tax returns 20) 85   Furnace ($4,000 × . State tax returns 02273) 91   Total depreciation 1,417 Net rental income for house   $3,694       Eileen uses Schedule E, Part I, to report her rental income and expenses. State tax returns She enters her income, expenses, and depreciation for the house in the column for Property A. State tax returns Since all property was placed in service this year, Eileen must use Form 4562 to figure the depreciation. State tax returns See the Instructions for Form 4562 for more information on preparing the form. State tax returns Prev  Up  Next   Home   More Online Publications