It’s no secret the IRS has few tax deductions for medical expenses available.
For starters, any taxpayer who files under the standard deduction can’t claim any medical tax savings at all, while those who itemize their returns under Form 1040’s Schedule A have their own set of limitations to consider – including exclusions for medical payments already covered by insurance, reimbursed by employers, or otherwise paid any other way (besides out-of-pocket).
Even the expenses that do qualify, are only eligible for a deduction if they surpass 7.5% of the taxpayer’s adjusted gross income, a threshold due to be 10% in 2019 thanks to the TCJA.
Thankfully, there’s one often overlooked tax deduction that could earn you some medical savings… travel expenses!
Provided that your allowable medical costs exceeds your AGI threshold, travel to and from hospitals, pharmacies, clinics, and doctors can be deducted in one of two ways:
1) Taxpayers can claim the cost of their ticket when traveling on a plane, bus, taxi, or train;
2) If traveling via their own car, they can either claim the standard deduction rate based on mileage, or claim the actual cost of the gas and oil used during the trip.
The standard mileage rate changes with the year, but as of 2018, it’s $0.18/per mile, while a separate standard rate can be applied to toll and parking fees as well. It should also be noted that the IRS considers the word “car” to apply to vans, panel trucks, motorcycles, and pickups.
A few special exceptions to the rule: the cost of a rental car that’s used exclusively for medical travel can be deducted, while at the same time, the IRS holds that any travel expense accompanied with a speeding ticket cannot be claimed – even if racing a woman in labor to the hospital.
So, to earn a bit of extra tax savings this year, remember to keep a log of each medical trip made, how many miles you drove, the cost of travel, and the purpose of the visit to avoid missing out on a single penny, or being unprepared in the event the IRS challenges your claim.