Nobody likes to get sick. To make matters worse, health care can be expensive. To help defray some of these costs, you may be able to take a personal tax deduction for some of your out-of-pocket medical expenses, including medical-related transportation and travel costs. However, the Tax Cuts and Jobs Act (TCJA), the massive new tax law that took effect in 2018, makes it harder for most taxpayers to deduct these expenses than in the past.
First of all, you can deduct your medical expenses only if you itemize your personal deductions on Schedule A of your tax return. You should itemize only if your total personal deductions exceed the standard deduction for the year. These personal deductions include not just your medical expenses (subject to the percentage limits discussed below), but also things like home mortgage interest and property taxes, state income taxes (subject to a $10,000 annual limit), and charitable contributions. You can use Schedule A (or tax preparation software) to determine whether or not you should itemize.
The TCJA roughly doubled the standard deduction to over $12,000 for individual taxpayers and over $24,000 for married couples who file jointly (as almost all do). Because the standard deduction is now so large, few taxpayers have enough personal deductions to itemize. Before the TCJA, about 30% of all taxpayers itemized. After the TCJA, only about 10% can itemize. As a result, most taxpayers are not able to deduct their medical expenses, including travel and transportation costs.
However, through careful planning, you can often increase your deductible personal expenses for a given year so that it pays to itemize that year. One way is to bunch as many personal deductions as possible into one year, instead of spreading them over several years. For example, you could bunch discretionary medical expenses into a single year. You can also use this strategy for charitable contributions.
If you do itemize, you may deduct your medical expenses, including medical transpiration costs, only if and to the extent your total expenses exceed a specified percentage of your adjusted gross income (AGI) for the year. The threshold is 10% of AGI for 2019 and later; it was 7.5% of AGI for 2018. For example, if your AGI is $100,000 in 2019, you may deduct your medical expenses on Schedule A only to the extent they exceed $10,000 (10% x $100,000 = $10,000). If you have $12,500 in medical expenses, you could deduct $2,500.
Fortunately, for tax purposes, medical expenses include many things, including health and dental insurance premiums you pay yourself, co-pays and deductibles, prescription drugs, dental, optometric and chiropractic care, and most other health related expenses. For a detailed list, see IRS Publication 502, Medical and Dental Expenses. Moreover, you can generally include medical-related travel and transportation costs, as well as some of the costs for lodging and meals while traveling for medical treatment.
Transportation and travel costs are generally deductible as a medical expense if they're needed to reach a medical treatment facility. These include travel costs to a doctor’s office, hospital, or clinic where you, your spouse, or dependents receive medical care. They also include the costs of visiting a mentally ill dependent, if the visits are recommended as a part of treatment.
However, transportation costs incurred by choice and not by necessity aren't deductible. For example, if you decide to travel to a distant location for an operation that could easily be performed in your area, the transportation costs aren't deductible. You also can't deduct:
Transportation costs you can deduct include:
Your medical-related driving costs can be calculated in one of two ways: using your actual expenses, or the standard medical mileage rate. If you use the actual expense method, you can only the deduct the cost of gas and oil, and any repair costs incurred while driving for medical reasons. You cannot include depreciation, insurance, general repair, or maintenance expenses. If you use the standard medical mileage rate, you don't deduct your actual costs for gas and oil. Instead, you may deduct 20 cents per mile you drive for medical treatment in 2019. For example, if you use the standard medical rate and drive 1,000 miles for medical treatment in 2019, you’d get a $200 deduction to add to all your other deductible medical expenses for the year. You can also deduct your parking fees and tolls. Whichever method you use, you must keep track of your mileage while driving for medical treatment. Check the IRS website for the annual standard deduction amount.
You can deduct the cost of meals at a hospital or similar facility if a main reason for being there is to get medical care. You can't include in medical expenses the cost of meals that aren't part of inpatient care. For example, you can’t deduct meals you pay for while traveling to a hospital or other medical facility.
Lodging costs you incur while traveling out of town are deductible if:
However, this deduction is limited to a maximum of $50 per night for each person. You can include lodging for a person traveling with the person receiving the medical care-for example, if a parent is traveling with a sick child, up to $100 per night can be deducted.
