The Medical Expenses Deduction

As I ran over my to-do list the other day, I made a note to make eye exams for one of the kids and myself.  She clearly needs new glasses, and mine are quite old and it might be time to invest in a new pair for myself as well.  My mind wandered off to how many pairs of glasses our family has purchased this year, and then on to how much dental work we've had done.  It has been quite a year in the non-Tricare covered expenses department.  And then it hit me – we might be eligible to deduct our medical expenses this year.

We itemize our income tax deductions because we own a house in an expensive area and it always works out better for us to itemize.  I always skip right over the medical deductions.  You are only permitted to deduct expenses in excess of 7.5 percent of your Adjusted Gross Income.  For example, if your adjusted gross income is $24,000 per year, you would need to have non-reimbursed medical expenses more than $1800 in order to claim any deduction.  That's a lot of non-reimbursed expenses, particularly considering that Tricare and United Concordia are pretty generous policies that do cover a lot of things.
 
However, if the military member in your family is deployed to a combat zone and is therefore tax-exempt a portion of the year, suddenly that 7.5% is a lot smaller number.  And if the service member is the only income, and they are in a combat zone for the entire year, then the families  adjusted gross income might be zero.  And (remember your elementary school math here, folks) 7.5% of zero is, yup, zero.  In that situation, any non-reimbursed medical expenses would be deductible.  That would be a great year to pick up that new pair of glasses that you've been postponing, or to do any dental work that will require payment on your part.
 
Obviously, every family has their own specific set of information that changes the equation.  However, if you think that this might  be the year when you will be able to deduct those medical expenses, this would be the right time to sharpen those pencils, do the math, and make those appointments before the end of the year.  I certainly will be!
 

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.