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What proof do I need for medical tax deductions?

January 31, 2012: 5:05 AM ET

I have more than enough bills to take a medical deduction. What proof is required? —David S., Rathdrum, Idaho

Record keeping is the easy part: File away every insurance bill, canceled check, credit card statement, and the like. The tough part is hitting the high bar to qualify — you can deduct only those medical expenses that exceed 7.5% of your adjusted gross income. As part of the health reform law, that threshold will rise to 10% in 2013. Fortunately, the definition of expenses is broad: doctor's bills, prescriptions, glasses, contact lenses, medical devices like wheelchairs, handrails in the bathroom, transportation to doctors' appointments, nursing home fees, and certain insurance costs (yes to Medicare B and D, no to Part A, yes to some long-term-care premiums). You cannot, however, double-dip: If you paid the bill with funds from a flexible spending account or health savings account, which are funded with pretax dollars, it's not deductible.

Posted in: Family Money, Taxes
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