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Expenses Include? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
What Medical Expenses Are Includible? . . . . . . . .
3
5
What’s New
Standard mileage rate. The standard mileage rate al-
lowed for operating expenses for a car when you use it for
medical reasons is:
• 15 cents a mile from January 1 to August 31, 2005,
and
• 22 cents a mile from September 1 to December 31,
2005.
See Transportation under What Medical Expenses Are
Includible.
Dependent. Beginning in 2005, you will use new rules to
determine if a person qualifies as your dependent. See
Dependent under Whose Medical Expenses Can You In-
clude.
Reminder
Get forms and other information
faster and easier by: Photographs of missing children. The Internal Reve-
nue Service is a proud partner with the National Center for
Internet • www.irs.gov Missing and Exploited Children. Photographs of missing
children selected by the Center may appear in this publica-
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tion on pages that would otherwise be blank. You can help Useful Items
bring these children home by looking at the photographs You may want to see:
and calling 1-800-THE-LOST (1-800-843-5678) if you rec-
ognize a child. Publication
❏ 969 Health Savings Accounts and Other
Tax-Favored Health Plans
Introduction
This publication explains the itemized deduction for medi- Forms (and Instructions)
cal and dental expenses that you claim on Schedule A ❏ 1040 U.S. Individual Income Tax Return
(Form 1040). It discusses what expenses, and whose
expenses, you can and cannot include in figuring the ❏ Schedule A (Form 1040) Itemized Deductions
deduction. It explains how to treat reimbursements and ❏ 8853 Archer MSAs and Long-Term Care Insurance
how to figure the deduction. It also tells you how to report Contracts
the deduction and what to do if you sell medical property or
receive damages for a personal injury. ❏ 8885 Health Coverage Tax Credit
Medical expenses include dental expenses, and in this
publication, the term “medical expenses” is often used to
refer to medical and dental expenses. What Are Medical Expenses?
You can deduct only the part of your medical and dental
expenses that is more than 7.5% of your adjusted gross Medical expenses are the costs of diagnosis, cure, mitiga-
income. If your medical and dental expenses are not more tion, treatment, or prevention of disease, and the costs for
than 7.5% of your adjusted gross income, you cannot claim treatments affecting any part or function of the body. They
a deduction. include the costs of equipment, supplies, and diagnostic
After discussing the medical and dental expenses de- devices needed for these purposes. They also include
duction, this publication explains how to treat dental expenses.
impairment-related work expenses, health insurance pre- Medical care expenses must be primarily to alleviate or
miums if you are self-employed, and the health coverage prevent a physical or mental defect or illness. They do not
tax credit that is available to certain individuals. include expenses that are merely beneficial to general
See How To Get Tax Help near the end of this publica- health, such as vitamins or a vacation.
tion for information about getting publications and forms. 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.
Comments and suggestions. We welcome your com- Medical expenses also include amounts paid for qualified
ments about this publication and your suggestions for long-term care services and limited amounts paid for any
future editions. qualified long-term care insurance contract.
You can write to us at the following address:
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3. Lived with you for more than half of 2005, and d. Stepbrother, stepsister, stepfather, stepmother,
4. Did not provide over half of his or her own support for son-in-law, daughter-in-law, father-in-law,
2005. mother-in-law, brother-in-law, or sister-in-law, or
e. Any other person (other than your spouse) who
Adopted child. A legally adopted child is treated as your lived with you all year as a member of your
own child. This child includes a child lawfully placed with household if your relationship does not violate lo-
you for legal adoption. cal law,
You can include medical expenses that you paid for a
child before adoption, if the child qualified as your depen- 2. Who was not a qualifying child (see Qualifying child
dent when the medical services were provided or when the above) of any other person for 2005, and
expenses were paid.
If you pay back an adoption agency or other persons for 3. For whom you provided over half of the support in
medical expenses they paid under an agreement with you, 2005. But see Children of divorced or separated par-
you are treated as having paid those expenses provided ents and Support claimed under a multiple support
you clearly substantiate that the payment is directly attribu- agreement, later.
table to the medical care of the child.
But if you pay the agency or other person for medical Support claimed under a multiple support agreement.
care that was provided and paid for before adoption negoti- If you are considered to have provided more than half of a
ations began, you cannot include them as medical ex- qualifying relative’s support under a multiple support
penses.
agreement, you can include medical expenses you pay for
You may be able to take a credit or exclusion for that person. A multiple support agreement is used when
TIP other expenses related to adoption. See the In- two or more people provide more than half of a person’s
structions for Form 8839, for more information. support, but no one alone provides more than half.
For rules regarding what expenses you can include this
Child of divorced or separated parents. For purposes year, see What Expenses Can You Include This Year,
of the medical and dental expenses deduction, a child of earlier.
divorced or separated parents can be treated as a depen- Any medical expenses paid by others who joined you in
dent of both parents. Each parent can include the medical the agreement cannot be included as medical expenses by
expenses he or she pays for the child, even if the other anyone. However, you can include the entire un-
parent claims the child’s dependency exemption, if: reimbursed amount you paid for medical expenses.
1. The child is in the custody of one or both parents for Example. You and your three brothers each provide
more than half the year, one-fourth of your mother’s total support. Under a multiple
2. The child receives over half of his or her support support agreement, you treat your mother as your depen-
during the year from his or her parents, and dent. You paid all of her medical expenses. Your brothers
repaid you for three-fourths of these expenses. In figuring
3. The child’s parents:
your medical expense deduction, you can include only
a. Are divorced or legally separated under a decree one-fourth of your mother’s medical expenses. Your broth-
of divorce or separate maintenance, ers cannot include any part of the expenses. However, if
you and your brothers share the nonmedical support items
b. Are separated under a written separation agree-
and you separately pay all of your mother’s medical ex-
ment, or
penses, you can include the amount you paid for her
c. Live apart at all times during the last 6 months of medical expenses in your medical expenses.
the year.
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What if the decedent’s return had been filed and the Artificial Limb
medical expenses were not included? Form 1040X can
be filed for the year or years the expenses are treated as You can include in medical expenses the amount you pay
paid, unless the period for filing an amended return for that for an artificial limb.
year has passed. 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 Artificial Teeth
date is later. You can include in medical expenses the amount you pay
for artificial teeth.
Example. John properly filed his 2004 income tax re-
turn. He died in 2005 with unpaid medical expenses of
$1,500 from 2004 and $1,800 in 2005. His survivor or Autoette
personal representative can file an amended return for
2004 claiming a deduction based on the $1,500 medical See Wheelchair, later.
expenses. The $1,800 of medical expenses from 2005 can
be included on the decedent’s final return for 2005. Bandages
What if you pay medical expenses of a deceased You can include in medical expenses the cost of medical
spouse or dependent? If you paid medical expenses for supplies such as bandages used to cover torn skin.
your deceased spouse or dependent, include them as
medical expenses on your Form 1040 in the year paid, Breast Reconstruction Surgery
whether they are paid before or after the decedent’s death.
The expenses can be included if the person was your You can include in medical expenses the amounts you pay
spouse or dependent either at the time the medical serv- for breast reconstruction surgery following a mastectomy
ices were provided or at the time you paid the expenses. for cancer.
Following is a list of items that you can include in figuring Braille Books and Magazines
your medical expense deduction. The items are listed in
alphabetical order. You can include in medical expenses the part of the cost of
Braille books and magazines for use by a visually impaired
Abortion person that is more than the cost of regular printed edi-
tions.
You can include in medical expenses the amount you pay
for a legal abortion. Capital Expenses
Acupuncture You can include in medical expenses amounts you pay for
special equipment installed in a home, or for improve-
You can include in medical expenses the amount you pay ments, if their main purpose is medical care for you, your
for acupuncture. spouse, or your dependent. The cost of permanent im-
provements that increase the value of your property may
be partly included as a medical expense. The cost of the
Alcoholism improvement is reduced by the increase in the value of
You can include in medical expenses amounts you pay for your property. The difference is a medical expense. If the
an inpatient’s treatment at a therapeutic center for alcohol value of your property is not increased by the improve-
addiction. This includes meals and lodging provided by the ment, the entire cost is included as a medical expense.
center during treatment. Certain improvements made to accommodate a home
to your disabled condition, or that of your spouse or your
You can also include in medical expenses amounts you
dependents who live with you, do not usually increase the
pay for transportation to and from Alcoholics Anonymous
value of the home and the cost can be included in full as
meetings in your community if the attendance is pursuant
medical expenses. These improvements include, but are
to medical advice that membership in Alcoholics Anony-
not limited to, the following items.
mous is necessary for the treatment of a disease involving
the excessive use of alcoholic liquors. • Constructing entrance or exit ramps for your home.
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• Widening doorways at entrances or exits to your not have to climb stairs. The elevator costs $8,000. An
home. appraisal shows that the elevator increases the value of
your home by $4,400. You figure your medical expense as
• Widening or otherwise modifying hallways and inte- shown in the filled-in example of Worksheet A.
rior doorways.
• Installing railings, support bars, or other modifica- Worksheet A. Capital Expense
tions to bathrooms. Worksheet—Illustrated
• Lowering or modifying kitchen cabinets and equip-
Instructions: Use this worksheet to figure the amount, if any,
ment. of your medical expenses due to a home improvement.
• Moving or modifying electrical outlets and fixtures.
1. Enter the amount you paid for the home
• Installing porch lifts and other forms of lifts (but ele- improvement . . . . . . . . . . . . . . . . . . . . . 1. 8,000
vators generally add value to the house).
2. Enter the value of your
• Modifying fire alarms, smoke detectors, and other home immediately after the
warning systems. improvement . . . . . . . . . . . . 2. 124,400
• Modifying stairways. 3. Enter the value of your
• Adding handrails or grab bars anywhere (whether or home immediately before
not in bathrooms). the improvement . . . . . . . . . 3. 120,000
• Modifying hardware on doors. 4. Subtract line 3 from line 2. This is the
increase in the value of your home due to
• Modifying areas in front of entrance and exit door- the improvement. . . . . . . . . . . . . . . . . . 4. 4,400
ways.
• If line 4 is more than or equal to line 1,
• Grading the ground to provide access to the resi- you have no medical expenses due to
dence. the home improvement; stop here.
• If line 4 is less than line 1, go to line 5.
Only reasonable costs to accommodate a home to a
disabled condition are considered medical care. Additional 5. Subtract line 4 from line 1. These are
costs for personal motives, such as for architectural or your medical expenses due to the home
aesthetic reasons, are not medical expenses. improvement . . . . . . . . . . . . . . . . . . . . . 5. 3,600
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Special design. You can include in medical expenses the Drug Addiction
difference between the cost of a regular car and a car
specially designed to hold a wheelchair. You can include in medical expenses amounts you pay for
Cost of operation. You cannot deduct the cost of operat- an inpatient’s treatment at a therapeutic center for drug
ing a specially equipped car, except as discussed under addiction. This includes meals and lodging at the center
Transportation, later. during treatment.
Chiropractor Drugs
You can include in medical expenses fees you pay to a See Medicines, later.
chiropractor for medical care.
Eyeglasses
Christian Science Practitioner You can include in medical expenses amounts you pay for
You can include in medical expenses fees you pay to eyeglasses and contact lenses needed for medical rea-
Christian Science practitioners for medical care. sons. You can also include fees paid for eye examinations.
You can include in medical expenses the cost of devices Guide Dog or Other Animal
used in diagnosing and treating illness and disease.
You can include in medical expenses the cost of a guide
Example. You have diabetes and use a blood sugar dog or other animal to be used by a visually impaired or
test kit to monitor your blood sugar level. You can include hearing-impaired person. You can also include the cost of
the cost of the blood sugar test kit in your medical ex- a dog or other animal trained to assist persons with other
penses. physical disabilities. Amounts you pay for the care of these
specially trained animals are also medical expenses.
Disabled Dependent Care Expenses
Health Institute
Some disabled dependent care expenses may qualify as
either: You can include in medical expenses fees you pay for
treatment at a health institute only if the treatment is pre-
• Medical expenses, or scribed by a physician and the physician issues a state-
• Work-related expenses for purposes of taking a ment that the treatment is necessary to alleviate a physical
credit for dependent care. or mental defect or illness of the individual receiving the
treatment.
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. Health Maintenance
Organization (HMO)
You can include in medical expenses amounts you pay to
entitle you, or your spouse or a dependent to receive
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medical care from a health maintenance organization. premiums are included in box 1 of your Form W-2. Also, do
These amounts are treated as medical insurance premi- not include on Schedule A (Form 1040) any other medical
ums. See Insurance Premiums, later. and dental expenses paid by the plan unless the amount
paid is included in box 1 of your Form W-2.
Hearing Aids Example. You are a federal employee participating in
You can include in medical expenses the cost of a hearing the premium conversion plan of the Federal Employee
aid and the batteries you buy to operate it. Health Benefits (FEHB) program. Your share of the FEHB
premium is paid by making a pre-tax reduction in your
salary. Because you are an employee whose insurance
Home Care premiums are paid with money that is never included in
See Nursing Services, later. your gross income, you cannot deduct the premiums paid
with that money.
Home Improvements Long-term care services. Contributions made by your
employer to provide coverage for qualified long-term care
See Capital Expenses, earlier. services under a flexible spending or similar arrangement
must be included in your income. This amount will be
Hospital Services reported as wages in box 1 of your Form W-2.
You can include in medical expenses amounts you pay for Health reimbursement arrangement (HRA). If you have
the cost of inpatient care at a hospital or similar institution if medical expenses that are reimbursed by a health reim-
a principal reason for being there is to receive medical bursement arrangement, you cannot include those ex-
care. This includes amounts paid for meals and lodging. penses in your medical expenses. This is because an HRA
Also see Lodging, later. is funded solely by the employer.
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also must include in gross income the value of unused sick Lifetime Care—Advance Payments
leave that, at your option, your employer applies to the cost
of your continuing participation in your employer’s health You can include in medical expenses a part of a life-care
plan after you retire. You can include this cost of continuing fee or “founder’s fee” you pay either monthly or as a lump
participation in the health plan as a medical expense. sum under an agreement with a retirement home. The part
If you participate in a health plan where your employer of the payment you include is the amount properly alloca-
automatically applies the value of unused sick leave to the ble to medical care. The agreement must require that you
cost of your continuing participation in the health plan (and pay a specific fee as a condition for the home’s promise to
you do not have the option to receive cash), do not include provide lifetime care that includes medical care. You can
the value of the unused sick leave in gross income. You use a statement from the retirement home to prove the
cannot include this cost of continuing participation in that amount properly allocable to medical care. The statement
health plan as a medical expense. must be based either on the home’s prior experience or on
information from a comparable home.
Insurance Premiums You Cannot Include Dependents with disabilities. You can include in medi-
cal expenses advance payments to a private institution for
You cannot include premiums you pay for: lifetime care, treatment, and training of your physically or
mentally impaired child upon your death or when you
• Life insurance policies,
become unable to provide care. The payments must be a
• Policies providing payment for loss of earnings, condition for the institution’s future acceptance of your
• Policies for loss of life, limb, sight, etc., child and must not be refundable.
• Policies that pay you a guaranteed amount each Payments for future medical care. Generally, you can-
week for a stated number of weeks if you are hospi- not include in medical expenses current payments for
talized for sickness or injury, or medical care (including medical insurance) to be provided
substantially beyond the end of the year. This rule does not
• The part of your car insurance premiums that pro- apply in situations where the future care is purchased in
vides medical insurance coverage for all persons
connection with obtaining lifetime care of the type de-
injured in or by your car because the part of the scribed earlier.
premium for you, your spouse, and your dependents
is not stated separately from the part of the premium
for medical care for others. Lodging
You can include in medical expenses the cost of meals and
lodging at a hospital or similar institution if a principal
Laboratory Fees reason for being there is to receive medical care. See
Nursing Home, later.
You can include in medical expenses the amounts you pay You may be able to include in medical expenses the
for laboratory fees that are part of medical care. cost of lodging not provided in a hospital or similar institu-
tion. You can include the cost of such lodging while away
Lead-Based Paint Removal from home if all of the following requirements are met.
You can include in medical expenses the cost of removing 1. The lodging is primarily for and essential to medical
lead-based paints from surfaces in your home to prevent a care.
child who has or has had lead poisoning from eating the 2. The medical care is provided by a doctor in a li-
paint. These surfaces must be in poor repair (peeling or censed hospital or in a medical care facility related
cracking) or within the child’s reach. The cost of repainting to, or the equivalent of, a licensed hospital.
the scraped area is not a medical expense.
If, instead of removing the paint, you cover the area with 3. The lodging is not lavish or extravagant under the
wallboard or paneling, treat these items as capital ex- circumstances.
penses. See Capital Expenses, earlier. Do not include the 4. There is no significant element of personal pleasure,
cost of painting the wallboard as a medical expense. recreation, or vacation in the travel away from home.
The amount you include in medical expenses for lodg-
Learning Disability ing cannot be more than $50 for each night for each
person. You can include lodging for a person traveling with
See Special Education, later. the person receiving the medical care. For example, if a
parent is traveling with a sick child, up to $100 per night
Legal Fees can be included as a medical expense for lodging. Meals
are not included.
You can include in medical expenses legal fees you paid Do not include the cost of lodging while away from home
that are necessary to authorize treatment for mental ill- for medical treatment if that treatment is not received from
ness. However, you cannot include in medical expenses a doctor in a licensed hospital or in a medical care facility
fees for the management of a guardianship estate, fees for related to, or the equivalent of, a licensed hospital or if that
conducting the affairs of the person being treated, or other lodging is not primarily for or essential to the medical care
fees that are not necessary for medical care. received.
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Medicines incurred to allow you to work may qualify for the child and
dependent care credit. See Publication 503, Child and
You can include in medical expenses amounts you pay for Dependent Care Expenses.
prescribed medicines and drugs. A prescribed drug is one You can also include in medical expenses part of the
that requires a prescription by a doctor for its use by an amount you pay for that attendant’s meals. Divide the food
individual. You can also include amounts you pay for expense among the household members to find the cost of
insulin. Except for insulin, you cannot include in medical the attendant’s food. Then divide that cost in the same
expenses amounts you pay for a drug that is not pre- manner as in the preceding paragraph. If you had to pay
scribed. additional amounts for household upkeep because of the
attendant, you can include the extra amounts with your
Note. This rule applies only to the deduction for medical medical expenses. This includes extra rent or utilities you
expenses. It does not limit reimbursements of medical pay because you moved to a larger apartment to provide
expenses by employer-sponsored health plans that reim- space for the attendant.
burse the cost of both prescription and nonprescription
medicines. Employment taxes. You can include as a medical ex-
Imported medicines and drugs. If you imported pense social security tax, FUTA, Medicare tax, and state
medicines or drugs from other countries, see Medicines employment taxes you pay for a nurse, attendant, or other
and Drugs From Other Countries, under What Expenses person who provides medical care. If the attendant also
Are Not Includible, later. provides personal and household services, you can in-
clude as a medical expense only the amount of employ-
ment taxes paid for medical services as explained earlier
Mentally Retarded, under Nursing Services. For information on employment
Special Home for tax responsibilities of household employers, see Publica-
tion 926, Household Employer’s Tax Guide.
You can include in medical expenses the cost of keeping a
mentally retarded person in a special home, not the home
of a relative, on the recommendation of a psychiatrist to
Operations
help the person adjust from life in a mental hospital to You can include in medical expenses amounts you pay for
community living. legal operations that are not for unnecessary cosmetic
surgery. See Cosmetic Surgery under What Expenses Are
Nursing Home Not Includible, later.
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You can also include parking fees and tolls. You can Vision Correction Surgery
add these fees and tolls to your medical expenses whether
you use actual expenses or use the standard mileage rate. See Eye Surgery, earlier.
Tuition X-ray
Under special circumstances, you can include charges for You can include in medical expenses amounts you pay for
tuition in medical expenses. See Special Education, ear- X-rays for medical reasons.
lier.
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.
What Expenses Are Not
Includible?
Vasectomy
Following is a list of some items that you cannot include in
You can include in medical expenses the amount you pay figuring your medical expense deduction. The items are
for a vasectomy. listed in alphabetical order.
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Nutritional Supplements 1. The food does not satisfy normal nutritional needs.
2. The food alleviates or treats an illness.
You cannot include in medical expenses the cost of nutri-
tional supplements, vitamins, herbal supplements, “natural 3. The need for the food is substantiated by a physi-
medicines,” etc. unless they are recommended by a medi- cian.
cal practitioner as treatment for a specific medical condi-
The amount you can include in medical expenses is limited
tion diagnosed by a physician. Otherwise, these items are
taken to maintain your ordinary good health, and are not to the amount by which the cost of the special food ex-
for medical care. ceeds the cost of a normal diet.
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䊴
Example. You have insurance policies which cover employer’s
contributions to Yes
your hospital and doctors’ bills but not your nursing bills.
The insurance you receive for the hospital and doctors’ your premiums
bills is more than their charges. In figuring your medical included in your
deduction, you must reduce the total amount you spent for income?
medical care by the total amount of insurance you received
even if the policies do not cover some of your medical No
expenses.
䊲
Health reimbursement arrangement (HRA). A health Did you pay any ALL of the excess
No
reimbursement arrangement is an employer-funded plan part of the 䊳 reimbursement is
that reimburses employees for medical care expenses and premiums? taxable.
allows unused amounts to be carried forward. An HRA is
funded solely by the employer and the reimbursements for Yes
medical expenses, up to a maximum dollar amount for a
coverage period, are not included in your income.
Other reimbursements. Generally, you do not reduce PART of the
medical expenses by payments you receive for: 䊳
excess
reimbursement is
• Permanent loss or loss of use of a member or func- taxable.*
tion of the body (loss of limb, sight, hearing, etc.) or
disfigurement to the extent the payment is based on
the nature of the injury without regard to the amount *See Premiums paid by you and your employer in this publication.
of time lost from work, or
• Loss of earnings. Premiums paid by you. If you pay the entire premium for
your medical insurance or all the costs of a plan similar to
You must, however, reduce your medical expenses by medical insurance, and your insurance payments or other
any part of these payments that is designated for medical reimbursements are more than your total medical ex-
costs. See How Do You Figure and Report the Deduction penses for the year, you have excess reimbursement.
on Your Tax Return, later. Generally, you do not include the excess reimbursement in
For how to treat damages received for personal injury or your gross income. However, gross income does include
sickness, see Damages for Personal Injuries, later. total payments in excess of $240 a day ($87,600 for 2005)
for qualified long-term care services.
What If Your Insurance Reimbursement Is Premiums paid by you and your employer. If both you
More Than Your Medical Expenses? and your employer contribute to your medical insurance
plan and your employer’s contributions are not included in
If you are reimbursed more than your medical expenses, your gross income, you must include in your gross income
you may have to include the excess in income. You may the part of your excess reimbursement that is from your
want to use Figure 1 to help you decide if any of your employer’s contribution.
reimbursement is taxable. You can figure the amount of the excess reimbursement
you must include in gross income using Worksheet B.
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Example. You are covered by your employer’s health However, you do not report as income the amount of
insurance policy. The annual premium is $1,200. Your reimbursement you received up to the amount of your
employer pays $300 and the balance of $900 is deducted medical deductions that did not reduce your tax for the
from your wages. You also paid the entire premium ($250) earlier year.
for a personal health insurance policy. For more information about the recovery of an amount
During the year, you paid medical expenses of $3,600. that you claimed as an itemized deduction in an earlier
In the same year, you were reimbursed $2,400 under your year, see Recoveries in Publication 525, Taxable and
employer’s policy and $1,600 under your own personal Nontaxable Income.
policy. The amount you must report as other income is
figured as follows.
What If You Are Reimbursed for Medical
Worksheet C. Excess Reimbursement Expenses You Did Not Deduct?
Includible in Income When If you did not deduct a medical expense in the year you
You Have More Than One paid it because your medical expenses were not more than
Policy—Illustrated 7.5% of your adjusted gross income, or because you did
not itemize deductions, do not include the reimbursement,
Instructions: Use this worksheet to figure the amount of up to the amount of the expense, in income. However, if
excess reimbursement you must include as income on your
tax return when a) you are reimbursed under two or more
the reimbursement is more than the expense, see What If
health insurance policies, b) at least one of which is paid for Your Insurance Reimbursement Is More Than Your Medi-
by both you and your employer, and c) your employer’s cal Expenses, earlier.
contributions are not included in your gross income. If you
and your employer did not share in the cost of at least one Example. Last year, you had $500 of medical ex-
policy, do not use this worksheet. penses. You cannot deduct the $500 because it is less
than 7.5% of your adjusted gross income. If, in a later year,
1. Enter the reimbursement from your you are reimbursed for any of the $500 of medical ex-
employer’s policy . . . . . . . . . . . . . . . . 1. 2,400 penses, you do not include that amount in your gross
2. Enter the reimbursement from your income.
own policy . . . . . . . . . . . . . . . . . . . . . . 2. 1,600
3. Add lines 1 and 2 . . . . . . . . . . . . . . . . 3. 4,000
How Do You Figure and Report
4. Divide line 1 by line 3 . . . . . . . . . . . . . 4. .60
5. Enter the total medical expenses you
the Deduction on Your Tax
paid during the year. If this amount is at
least as much as the amount on line 3,
Return?
stop here because there is no excess Once you have determined which medical care expenses
reimbursement. . . . . . . . . . . . . . . . . . . 5. 3,600 you can include, figure and report the deduction on your
6. Multiply line 4 by line 5 . . . . . . . . . . . . 6. 2,160 tax return.
7. Subtract line 6 from line 1 . . . . . . . . . . 7. 240
What Tax Form Do You Use?
8. Enter employer’s contribution to the
annual cost of the employer’s policy . . 8. 300 You report your medical expense deduction on Schedule
9. Enter total annual cost of the A, Form 1040. You cannot claim medical expenses on
employer’s policy . . . . . . . . . . . . . . . . 9. 1,200 Form 1040A or Form 1040EZ. An example of a filled-in
medical and dental expense part of Schedule A is shown.
10. Divide line 8 by line 9. This is the
percentage of your total excess
reimbursement you must report as
How Do You Figure Your Deduction?
other income . . . . . . . . . . . . . . . . . . . . 10. .25 To figure your medical and dental expense deduction,
11. Multiply line 7 by line 10. This is the complete lines 1 –4 of Schedule A, Form 1040, as follows:
amount of your total excess
reimbursement you must report as Line 1. Enter the amount you paid for medical expenses
other income on Form 1040, line 21 . . 11. 60 after reducing the amount by payments you received from
insurance and other sources.
Line 2. Enter your adjusted gross income from Form
What If You Receive Insurance 1040, line 38.
Reimbursement in a Later Year? Line 3. Multiply the amount on line 2 (adjusted gross
income) by 7.5% (.075) and enter the result.
If you are reimbursed in a later year for medical expenses
you deducted in an earlier year, you generally must report Line 4. If line 3 is more than line 1, enter -0-. Otherwise,
the reimbursement as income up to the amount you previ- subtract the amount on line 3 from the amount on line 1.
ously deducted as medical expenses. This is your deduction for medical and dental expenses.
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Example. Bill and Helen Jones belong to a group medi- 3. For Betty Jones (Bill’s dependent sister), they paid
cal plan and part of their insurance is paid by Bill’s em- $450 for doctors and $350 for prescription medicines
ployer. They file a joint return, and their adjusted gross and drugs, which totals $800.
income is $33,004. The following list shows the net Bill and Helen add all their medical and dental expenses
amounts, after insurance reimbursements, that Bill and together ($1,859 + $775 + $800 = $3,434). They figure
Helen paid this year for medical expenses. their deduction on the medical and dental expenses part of
Schedule A, Form 1040, as shown.
1. For themselves, Bill and Helen paid $375 for pre-
scription medicines and drugs, $337 for hospital bills, Recordkeeping. For each medical expense,
$439 for doctor bills, $295 for hospitalization insur- you should keep a record of:
ance, $380 for medical and surgical insurance, and RECORDS
Name of each person Address of each Amount paid Date paid Transportation
you paid person you paid (mileage, taxi, etc.)
1.
2.
3.
4.
5.
6.
7.
8.
9.
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Use Worksheet D, later, to figure the adjusted basis of the Worksheet E. Gain or Loss On the Sale of
equipment or property. Medical Equipment or
Property
Worksheet D. Adjusted Basis of Medical
Equipment or Property Sold Instructions: Use the following worksheet to figure total gain
or loss on the sale of medical equipment or property that you
Instructions: Use this worksheet if you deducted the cost of deducted in an earlier year.
medical equipment or property in one year and sold the
equipment or property in a later year. This worksheet will give 1. Enter the amount that the medical
you the adjusted basis of the equipment or property you sold. equipment or property sold for . . . . . 1.
1. Enter the cost of the equipment 2. Enter your selling expenses . . . . . . . 2.
or property. . . . . . . . . . . . . . . . . 1. 3. Subtract line 2 from line 1 . . . . . . . . . 3.
2. Enter your total includible 4. Enter the adjusted basis of the
medical expenses for the year equipment or property from line 5 or
you included the cost in your Worksheet D, line 12 . . . . . . . . . . . . 4.
medical expenses . . . . . . . . . . . 2.
5. Subtract line 4 from line 3. This is the
3. Divide line 1 by line 2 . . . . . . . . . 3. total gain or loss from the sale of the
4. Enter 7.5% of your AGI for the medical equipment or property. . . . . . 5.
year the cost was included in
your medical expenses . . . . . . . 4. If you have a loss, it is not deductible. If you have a gain,
5. Multiply line 3 by line 4. If your it is includible in your income. The part of the gain that is a
allowable itemized deductions for recovery of an amount you previously deducted is taxable
the year you purchased the as ordinary income. Enter it on Form 1040, line 21. Any
equipment or property were not part of the gain that is more than the recovery of an amount
more than your AGI for that year, you previously deducted, is taxable as a capital gain. Enter
stop here. This is the adjusted it on Schedule D (Form 1040).
basis of the equipment or
property. If your allowable For more information about the recovery of an amount
itemized deductions for the year that you claimed as an itemized deduction in an earlier
you purchased the equipment or year, see Recoveries in Publication 525.
property were more than your
AGI for that year, complete lines Example. You have a heart condition and difficulty
6 through 11 . . . . . . . . . . . . . . . 5. breathing. Your doctor prescribed oxygen equipment to
6. Subtract line 5 from line 1 . . . . . 6. help you breathe. Last year, you bought the oxygen equip-
ment for $3,000. You itemized deductions and included it
7. Enter your total allowable
in your medical expense deduction.
itemized deductions for the year
the cost was included in your Last year you also paid $10,750 for deductible medical
medical expenses . . . . . . . . . . . 7. services and $6,400 for other itemized deductions. Your
8. Divide line 6 by line 7 . . . . . . . . . 8. adjusted gross income (AGI) was $15,000.
9. Enter your AGI for the year the Taking into account the 7.5% limit on medical expenses,
cost was included in your medical your allowable itemized deductions totaled $19,025, fig-
expenses . . . . . . . . . . . . . . . . . . 9. ured as follows:
10. Subtract line 9 from line 7 . . . . . 10. Oxygen equipment . . . . . . . . . . . . . . . . . . . . . 3,000
11. Multiply line 8 by line 10. . . . . . . 11. Medical services . . . . . . . . . . . . . . . . . . . . . . . 10,750
Total medical expenses . . . . . . . . . . . . . . . . . 13,750
12. Add line 5 to line 11. If your 7.5% of AGI (.075 × $15,000) . . . . . . . . . . . . . −1,125
allowable itemized deductions for Allowable medical expense deduction . . . . . . . 12,625
the year you purchased the Other itemized deductions . . . . . . . . . . . . . . . 6,400
equipment or property were more
than your AGI for that year, this is Allowable itemized deductions . . . . . . . . . . . . 19,025
the adjusted basis of the
equipment or property . . . . . . . . 12.
Next, use Worksheet E to figure the total gain or loss on You figure your adjusted basis as shown on the filled-in
the sale of the medical equipment or property. Worksheet D.
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8. Divide line 6 by line 7 . . . . . . . . . 8. .145 Example. You sued this year for injuries you suffered in
9. Enter your AGI for the year the an accident last year. You sought $10,000 for your injuries
cost was included in your and did not itemize your damages. Last year, you paid
medical expenses . . . . . . . . . . . 9. 15,000 $500 for medical expenses for your injuries. You deducted
those expenses on last year’s tax return. This year you
10. Subtract line 9 from line 7 . . . . . 10. 4,025 settled your lawsuit for $2,000. Your settlement did not
11. Multiply line 8 by line 10. . . . . . . 11. 584 itemize or allocate the damages. The $2,000 is first pre-
sumed to be for the medical expenses that you deducted.
12. Add line 5 to line 11. If your The $500 is includible in your income this year because the
allowable itemized deductions for entire $500 was allowed as a medical expense deduction
the year you purchased the last year.
equipment or property were
more than your AGI for that year, Future medical expenses. If you receive an amount in
this is the adjusted basis of the settlement of a damage suit for personal injuries, part of
equipment or property. . . . . . . . . 12. 829 that award may be for future medical expenses. If it is, you
must reduce any future medical expenses for these injuries
This year you sold the oxygen equipment for $2,025 and until the amount you received has been completely used.
you had selling expenses of $25. You must report on this
year’s tax return part of the $2,000 as ordinary income. To Example. You were injured in an accident. You sued
compute the part of the sales price that is taxable, you and sought a judgment of $50,000 for your injuries. You
must determine the gain by subtracting the total adjusted settled the suit for $45,000. The settlement provided that
basis from the selling price. $10,000 of the $45,000 was for future medical expenses
for your injuries. You cannot include the first $10,000 that
you pay for medical expenses for those injuries.
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Who Can Take This Credit? 2. Are reemployed not more than 26 weeks after the
date of separation from the adversely affected em-
You can take this credit for any month in which all of the ployment,
following were true on the first day of the month. 3. Are at least 50 years of age,
1. You were an eligible: 4. Do not earn more than $50,000 a year in wages from
reemployment,
a. Trade adjustment assistance (TAA) recipient,
5. Are employed on a full-time basis, and
b. Alternative TAA recipient, or
6. Do not return to the employment from which you
c. Pension Benefit Guaranty Corporation (PBGC) were separated.
pension recipient.
2. You paid the premium for qualified health insurance PBGC Pension Recipient
coverage for yourself. See Qualified Health Insur-
ance, later. You were an eligible PBGC pension recipient on the first
3. You were not imprisoned under federal, state, or day of the month, if both of the following apply.
local authority.
1. You were age 55 or older on the first day of the
4. You did not have other specified coverage. See month.
Other Specified Coverage, later.
2. You received a benefit for that month that was paid
by the PBGC under title IV of the Employee Retire-
No credit if exemption claimed by another taxpayer. ment Income Security Act of 1974 (ERISA).
You cannot take this credit if you can be claimed as an
exemption on someone else’s tax return. Lump-sum payment. Item (2) above will also apply if you
received a lump-sum payment from the PBGC after August
TAA Recipient 5, 2002, for any month that you would have received a
PBGC benefit if you had not received a lump-sum pay-
You were an eligible TAA recipient on the first day of the ment.
month if, for any day in that month or the prior month, you:
• Received a trade readjustment allowance, or
Qualifying Family Member
• Would have been entitled to receive such an allow- You can include the premiums you pay for qualified health
ance except that you had not exhausted all rights to insurance for qualifying family members in figuring your
any unemployment insurance (except additional credit. A qualifying family member is:
compensation that is funded by a state and is not • Your spouse (but see Married persons filing sepa-
reimbursed from any federal funds) to which you rate returns below), or
were entitled (or would be entitled if you applied).
• Anyone whom you can claim as a dependent on
your tax return. (For children whose parents are di-
Example. You received a trade readjustment allow- vorced, see Children of divorced parents, later.)
ance for January 2005. You were an eligible TAA recipient
on the first day of January and February. However, if any otherwise qualifying family member has
other specified coverage (defined later), then that person is
not a qualifying family member.
Alternative TAA Recipient
Married persons filing separate returns. Your spouse is
You were an eligible alternative TAA recipient on the first not treated as a qualifying family member if:
day of the month if, for that month or the prior month, you
received benefits under an alternative trade adjustment • You are married on the last day of the year,
assistance program for older workers established by the
Department of Labor. • Your spouse was an eligible TAA recipient, alterna-
tive TAA recipient, or PBGC pension recipient during
Example. You received benefits under an alternative the year, and
trade adjustment assistance program for older workers for • You file a separate return for the year.
October 2005. The program was established by the De-
partment of Labor. You were an eligible alternative TAA Married and living apart. You are not considered mar-
recipient on the first day of October and November. ried on the last day of the year if all of the following apply.
Alternative TAA workers. If you are an eligible alterna- • You file a separate return.
tive TAA recipient, you are eligible for this credit for a • Your home is the home for more than half the year
period up to 2 years if you: of a dependent under age 13 or a dependent who is
physically or mentally not able to care for himself or
1. Are covered by a qualifying certification, herself.
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• You pay more than half the cost of keeping up your benefit as an eligible individual (defined earlier). For
home for the year. this purpose, coverage under an individual health
• Your spouse does not live in your home for the last 6 insurance policy includes medical insurance offered
months of the year. to individuals and their families, but does not include
coverage under a federal, state, or other group
Legally separated. You are not considered married if health insurance policy.
you are legally separated from your spouse under a decree
of divorce or separate maintenance. You can claim the State-qualified health insurance. The following health
credit on a separate return. insurance qualifies for the credit to the extent the sponsor-
ing state elects to have it apply.
Children of divorced parents. You may be able to take
the credit based on amounts paid for qualified health insur- • State-based continuation coverage provided by the
ance expenses of your child even if the child is not your state under a state law that requires such coverage.
dependent. If your child is not your dependent, he or she is • Coverage offered through a qualified state high-risk
a qualifying family member only if all of the following apply. pool.
• The parents are divorced or legally separated or • Coverage under a health insurance program offered
lived apart at all times during the last 6 months of the to state employees or a similar state-based health
year.
insurance program.
• The child received over half of his or her support for • Coverage through an arrangement entered into by
the year from the parents (without regard to the rules
the state and a group health plan, an issuer of health
on multiple support agreements). See Support
insurance coverage, an administrator, or an em-
claimed under a multiple support agreement earlier.
ployer.
• The child is in custody of one or both of the parents • Coverage offered through a state arrangement with
for more than half of the year.
a private sector health care coverage purchasing
• A decree of divorce or separate maintenance or writ- pool.
ten separation agreement that applies to 2005 pro-
vides that (a) the noncustodial parent can claim the • Coverage under a state-operated health plan that
exemption for the child, or (b) the custodial parent does not receive any federal financial participation.
will sign a written declaration that he or she will not
claim the child as a dependent for 2005. If the di- To find out which plans are qualified for your state, you
vorce or separation agreement went into effect can:
before 1985, this requirement is met if the noncus- • Visit the website, www.irs.gov, type “hctc” in the IRS
todial parent provides at least $600 for the support of keyword box, click on “go,” and then under Re-
the child for the year. sources, click on A list of Qualified Health Plans
organized by state, or
The noncustodial parent is the parent with whom the
child lived for the lesser portion of the year. • You can call 1-866-628-4282 (tollfree) (or TDD/TTY
If this exception applies, the other parent cannot treat 1-866-626-4282) between 8:00 a.m. and 5:00 p.m.
the child as a qualifying family member for purposes of the central time, Monday through Friday.
HCTC, even though that parent claims the child as a
dependent.
If you can treat the child as a qualifying family member Nonqualified Health Insurance
for purposes of the HCTC, even though you do not claim
the child as your dependent, the child must also meet all of The following health insurance does not qualify for the
the other conditions of a qualifying family member. credit.
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g. Automobile medical payment insurance, listed earlier under (1) or (2) under Nonqualified
Health Insurance) if at least 50% of the cost of the
h. Credit-only insurance,
coverage is paid by an employer (or former em-
i. Limited scope dental or vision benefits, ployer) of you or your spouse.
j. Benefits for long-term care, nursing home care, 2. Any of the following government health programs:
home health care, community-based care (or any
combination), or a. Medicare Part A or Part B,
k. Coverage for only a specified disease or illness. b. Medicaid, or the State Children’s Health Insur-
ance Program (SCHIP),
3. Coverage under a flexible spending or similar ar- c. The Federal Employees Health Benefit Plan
rangement. (FEHBP), or
d. Tricare, the medical and dental care program for
Insurance that covers other individuals. If you have members and certain former members of the uni-
qualified health insurance that covers anyone besides formed services and their dependents.
yourself and your qualifying family member(s), (defined
earlier), you may not be able to take into account all of your
payments. You cannot treat an amount as paid for insur- Benefits from the Veterans Administration. Entitle-
ance for yourself and qualifying family members unless all ment to or receipt of benefits from the Veterans Adminis-
of the following requirements are met. tration is not other specified coverage.
• The charge for insurance for yourself and qualifying Two important points here are that you are not
family members is either separately stated in the
contract or furnished to you by the insurance com-
!
CAUTION
entitled to the credit for a month, if on the first day
of that month, you are either:
pany in a separate statement.
• The amount you paid for insurance for yourself and 1. Covered by Medicare, or
qualifying family members is not more than the 2. Covered by a group health plan available through
charge that is stated in the contract or furnished by your or your spouse’s employer and the em-
the insurance company. ployer contributes 50% or more of the premium.
• The amount stated in the contract or furnished by
the insurance company is not unreasonably large in
relation to the total charges under the contract.
How To Report
To claim the credit, complete Form 8885, Health Coverage
Eligible Coverage Month Tax Credit, and attach it to your Form 1040 or Form
1040NR. Report the credit on Form 1040, line 70, or Form
Eligibility for the credit is determined on a monthly basis. 1040NR, line 64, and check box c. You cannot claim the
An eligible coverage month is any month in which, as of the credit on Form 1040A or Form 1040EZ.
first day of the month, you: You must attach invoices and proof of payment for any
1. Are an eligible TAA recipient, eligible alternative TAA amounts you include on Form 8885, line 2, for which you
recipient, or eligible PBGC recipient (see TAA Recip- did not receive an advance payment. If you file your return
ient, Alternative TAA Recipient or PBGC Pension electronically, attach the invoices and proof of payment to
Recipient earlier), your Form 8453 or 8453-OL. Proof of payment may include
a pay stub if insurance is through a spouse’s employment,
2. Are covered by qualified health insurance (defined a bank check, or bank statement for premiums that are
earlier) that you pay for, automatically deducted from your account.
3. Do not have other specified coverage (defined later), If you claim this credit, you cannot take the same ex-
and penses that you use to figure your health coverage tax
credit into account in determining your:
4. Are not imprisoned under federal, state, or local au-
thority. • Medical and dental expenses on Schedule A (Form
1040),
If you file a joint return, only one spouse has to satisfy the
requirements. • Self-employed health insurance deduction, or
• Archer Medical Savings Account (MSA) distributions.
Other Specified Coverage
Even if you are otherwise eligible, you are not eligible for Refundable Credit
the credit for a month if, as of the first day of the month, you
have other specified coverage. Other specified coverage is The HCTC credit is refundable. You may claim the full
coverage under the following. credit even if you do not owe any taxes or earn any income.
To get the credit, you must:
1. Any insurance which constitutes medical care (un-
less substantially all of that insurance is for benefits 1. Qualify for the credit, and
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2. File a tax return, even if you: Free tax services. To find out what services are avail-
able, get Publication 910, IRS Guide to Free Tax Services.
a. Do not owe any tax, It contains a list of free tax publications and an index of tax
b. Did not earn enough money to file a return, or topics. It also describes other free tax information services,
including tax education and assistance programs and a list
c. Did not have income taxes withheld from your of TeleTax topics.
pay.
Internet. You can access the IRS website 24
See How To Report earlier for instructions on how to hours a day, 7 days a week, at www.irs.gov to:
claim this credit.
Advance Payments • E-file your return. Find out about commercial tax
preparation and e-file services available free to eli-
You can either take this credit on your tax return or have it gible taxpayers.
paid on your behalf in advance to your insurance company. • Check the status of your 2005 refund. Click on
Your payments and any payments paid on your behalf in Where’s My Refund. Be sure to wait at least 6
advance are treated as having been made on the first day weeks from the date you filed your return (3 weeks
of the month for which they are made. if you filed electronically). Have your 2005 tax re-
You can get your credit in advance by calling the HCTC turn available because you will need to know your
customer contact center at 1-866-628-4282 (tollfree) (or social security number, your filing status, and the
TDD/TTY 1-866-626-4282) between 8:00 a.m. and 5:00 exact whole dollar amount of your refund.
p.m. central time, Monday through Friday, to register. The
Treasury Department will pay your insurer 65% of your • Download forms, instructions, and publications.
health insurance premiums as you pay the remaining 35%. • Order IRS products online.
The amount of credit you can claim on your tax return • Research your tax questions online.
will be reduced by the amount of any credit paid in advance • Search publications online by topic or keyword.
on your behalf. If you received National Emergency Grant • View Internal Revenue Bulletins (IRBs) published in
(NEG) payments during 2005 for qualified health insur- the last few years.
ance, those payments will also reduce the amount of the
credit you can claim.
• Figure your withholding allowances using our Form
W-4 calculator.
• Sign up to receive local and national tax news by
email.
How To Get Tax Help • Get information on starting and operating a small
You can get help with unresolved tax issues, order free business.
publications and forms, ask tax questions, and get informa- Phone. Many services are available by phone.
tion from the IRS in several ways. By selecting the method
that is best for you, you will have quick and easy access to
tax help.
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To help us develop a more useful index, please let us know if you have ideas for index entries.
Index See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.
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Publications (See Tax help) Medical and dental expenses . . . . 3 Includible expenses . . . . . . . . . 12, 13
Separated taxpayers: Parking fees and tolls . . . . . . . . . . . 13
R Health coverage tax credit . . . . . . 24 Standard mileage rate for car use
Radial keratotomy . . . . . . . . . . . . . . . . 7 Medical expenses of child . . . . . . . 4 for medical . . . . . . . . . . . . . . . . . . . . 1
Recordkeeping . . . . . . . . . . . . . . . . . . . 19 Sick leave: Trips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Rehabilitation facilities . . . . . . . . . . 11 Used to pay health insurance TTY/TDD information . . . . . . . . . . . . 26
Reimbursements . . . . . . . . . . . . . 15-18 premiums . . . . . . . . . . . . . . . . . . . . . 8 Tuition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Excess includible in income: Special education . . . . . . . . . . . . . . . . 12
When more than one policy Spouse’s medical expenses . . . . . 3 V
(Worksheet C) . . . . . . . . . . . . . 18 Deceased spouse . . . . . . . . . . . . . . . 5 Vasectomy . . . . . . . . . . . . . . . . . . . . . . . 13
When one policy (Worksheet Standard mileage rates: Veterinary fees . . . . . . . . . . . . . . . . . . . 15
B) . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Medical reasons for use of Vision correction surgery . . . . . . . . 7
Excess may be taxable (Figure car . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Visually-impaired persons:
1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Sterilization . . . . . . . . . . . . . . . . . . . . . . 12 Guide dog or other animal for . . . . 7
Health Reimbursement Stop-smoking programs . . . . . . . . 12
Arrangement (HRA) . . . . . . . . . . 16 Suggestions for publication . . . . . 2
Insurance . . . . . . . . . . . . . . . . . . . . . . . 16
W
Surgery (See Operations)
Medical expenses not Weight-loss programs . . . . . . . 13, 15
Swimming lessons . . . . . . . . . . . . . . 14
deducted . . . . . . . . . . . . . . . . . . . . . 18 What’s new:
More than one policy . . . . . . . . . . . 17 Dependents . . . . . . . . . . . . . . . . . . . . . 1
Received in later year . . . . . . . . . . 18
T Standard mileage rate . . . . . . . . . . . 1
Tables and figures: Wheelchairs . . . . . . . . . . . . . . . . . . . . . . 13
Rental property:
Medical equipment or property: Wigs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Improvements to . . . . . . . . . . . . . . . . . 6
Adjusted basis (Worksheet Work expenses:
Reporting: D) . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Health coverage tax credit . . . . . . 25 Disabled dependent care . . . . . . . . 7
Gain or loss (Worksheet Impairment-related . . . . . . . . . . . . . 22
Impairment-related work E) . . . . . . . . . . . . . . . . . . . . . . . . . . 21
expenses . . . . . . . . . . . . . . . . . . . . . 22 Workers’ compensation . . . . . . . . . 22
Reimbursements, excess includible
Medical and dental Worksheets:
in income:
expenses . . . . . . . . . . . . . . . . . . . . . 18 Capital expenses (Worksheet
When more than one policy
Medical deduction (See Form A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(Worksheet C) . . . . . . . . . . . . . 18
1040, Schedule A) Medical equipment or property:
When one policy (Worksheet
Self-employed persons, health Adjusted basis (Worksheet
B) . . . . . . . . . . . . . . . . . . . . . . . . . . 17
insurance costs . . . . . . . . . . . . . . 22 D) . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Reimbursements, excess may be
Gain or loss (Worksheet
taxable (Figure 1) . . . . . . . . . . . . 16
S E) . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Tax help . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Reimbursements, excess includible
Sale of medical equipment or Taxpayer Advocate . . . . . . . . . . . . . . 26
property . . . . . . . . . . . . . . . . . . . . . 19-21 in income:
Teeth: When more than one policy
Adjusted basis (Worksheet Artificial . . . . . . . . . . . . . . . . . . . . . . . . . . 5
D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 (Worksheet C) . . . . . . . . . . . . . 18
Dental treatment . . . . . . . . . . . . . . . . . 7 When one policy (Worksheet
Gain or loss (Worksheet E) . . . . . 21 Whitening . . . . . . . . . . . . . . . . . . . . . . . 15 B) . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Schedules (See Form 1040) Telephone . . . . . . . . . . . . . . . . . . . . . . . . 12
Seeing-eye dogs . . . . . . . . . . . . . . . . . . 7 Television . . . . . . . . . . . . . . . . . . . . . . . . 12
Self-employed persons: X
Therapy . . . . . . . . . . . . . . . . . . . . . . . . . . 12 X-rays . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Health coverage tax credit . . . . . . 25 Transplants . . . . . . . . . . . . . . . . . . . . . . 12
Health insurance costs . . . . . . . . . 22 ■
Travel and transportation
Senior housing . . . . . . . . . . . . . . . . . . 11 expenses . . . . . . . . . . . . . . . . . . . . . . 12
Separate returns: Car expenses . . . . . . . . . . . . . . . . . . . 12
Community property states . . . . . . 3
Page 30
Page 31 of 31 of Publication 502 13:03 - 19-DEC-2005
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
See How To Get Tax Help for a variety of ways to get publications, including
Tax Publications for Individual Taxpayers by computer, phone, and mail.
General Guides 531 Reporting Tip Income 908 Bankruptcy Tax Guide
1 Your Rights as a Taxpayer 536 Net Operating Losses (NOLs) for 915 Social Security and Equivalent
17 Your Federal Income Tax (For Individuals, Estates, and Trusts Railroad Retirement Benefits
Individuals) 537 Installment Sales 919 How Do I Adjust My Tax Withholding?
334 Tax Guide for Small Business (For 541 Partnerships 925 Passive Activity and At-Risk Rules
Individuals Who Use Schedule C or 544 Sales and Other Dispositions of Assets 926 Household Employer’s Tax Guide
C-EZ) 547 Casualties, Disasters, and Thefts 929 Tax Rules for Children and
509 Tax Calendars for 2006 550 Investment Income and Expenses Dependents
553 Highlights of 2005 Tax Changes 551 Basis of Assets 936 Home Mortgage Interest Deduction
910 IRS Guide to Free Tax Services 552 Recordkeeping for Individuals 946 How To Depreciate Property
554 Older Americans’ Tax Guide 947 Practice Before the IRS and
Specialized Publications Power of Attorney
555 Community Property
3 Armed Forces’ Tax Guide 556 Examination of Returns, Appeal Rights, 950 Introduction to Estate and Gift Taxes
54 Tax Guide for U.S. Citizens and and Claims for Refund 967 The IRS Will Figure Your Tax
Residents Aliens Abroad 559 Survivors, Executors, and 969 Health Savings Accounts and Other
225 Farmer’s Tax Guide Administrators Tax-Favored Health Plans
463 Travel, Entertainment, Gift, and Car 561 Determining the Value of Donated 970 Tax Benefits for Education
Expenses Property 971 Innocent Spouse Relief
501 Exemptions, Standard Deduction, and 564 Mutual Fund Distributions 972 Child Tax Credit
Filing Information 570 Tax Guide for Individuals With Income 1542 Per Diem Rates
502 Medical and Dental Expenses (Including From U.S. Possessions 1544 Reporting Cash Payments of Over
the Health Coverage Tax Credit) 571 Tax-Sheltered Annuity Plans (403(b) $10,000 (Received in a Trade or
503 Child and Dependent Care Expenses Plans) Business)
504 Divorced or Separated Individuals 575 Pension and Annuity Income 1546 The Taxpayer Advocate Service—How
505 Tax Withholding and Estimated Tax 584 Casualty, Disaster, and Theft Loss to Get Help With Unresolved Problems
514 Foreign Tax Credit for Individuals Workbook (Personal-Use Property)
516 U.S. Government Civilian Employees
Spanish Language Publications
587 Business Use of Your Home (Including
Stationed Abroad Use by Daycare Providers) 1SP Derechos del Contribuyente
517 Social Security and Other Information 590 Individual Retirement Arrangements 579SP Cómo Preparar la Declaración de
for Members of the Clergy and (IRAs) Impuesto Federal
Religious Workers 593 Tax Highlights for U.S. Citizens and 594SP Que es lo que Debemos Saber sobre
519 U.S. Tax Guide for Aliens Residents Going Abroad el Proceso de Cobro del IRS
521 Moving Expenses 594 What You Should Know About the IRS 596SP Crédito por Ingreso del Trabajo
523 Selling Your Home Collection Process 850 English-Spanish Glossary of Words
524 Credit for the Elderly or the Disabled 596 Earned Income Credit (EIC) and Phrases Used in Publications
525 Taxable and Nontaxable Income 721 Tax Guide to U.S. Civil Service Issued by the Internal Revenue
526 Charitable Contributions Retirement Benefits Service
527 Residential Rental Property 901 U.S. Tax Treaties 1544SP Informe de Pagos en Efectivo en
907 Tax Highlights for Persons with Exceso de $10,000 (Recibidos en
529 Miscellaneous Deductions una Ocupación o Negocio)
530 Tax Information for First-Time Disabilities
Homeowners
Commonly Used Tax Forms See How To Get Tax Help for a variety of ways to get forms, including by computer, phone, and mail.
Page 31