Thursday, January 22, 2009

Medical Transportation Expenses

Q. Can you help us understand the rules regarding deducting mileage for medical care?

A. Transportation expenses for medical care (including dental care) for you, your spouse, and your dependent(s) should be included in the "Medical and Dental Expenses" part of Form 1040, Schedule A. Most people use the "standard mileage rate" allowed by the IRS, rather than the actual cost of gasoline, tires, oil, etc.

The standard mileage rate in 2008 for medical care was 19 cents per mile for the first six months of the year, and 27 cents per mile for the last six months of the year. If you kept a log or diary showing how many miles you drove your car for medical purposes, you would multiply the miles driven from January 1, 2008, through June 30, 2008, by 19 cents and the miles driven from July 1, 2008, through December 31, 2008, by 27 cents. You can also deduct parking fees, tolls, taxi fares, and bus fares.

For example, John drove 1,000 miles between January 1st and June 30th for medical care for himself, his wife, and their two minor children. During that same period, Mary, John's wife, also drove 1,000 miles for medical care for herself and the children. Since John and Mary file a joint return, they would multiply 2,000 by 19 cents to arrive at one part of their medical care expense ($380) for 2008. If John and Mary each drove 1,000 miles between July 1st and December 31st, they would multiply 2,000 by 27 cents to arrive at another part of their medical care expense ($540) for 2008.

To this $920, John and Mary would add their other medical expenses, such as out-of-pocket costs for health insurance, medicines, doctor and dental visits, eyeglasses, etc., to arrive at their total medical and dental expenses. Sadly, since the amount of the allowable deduction is the total of all medical and dental expenses (line 1 on Schedule A) minus 7.5% of their adjusted gross income (line 38 on their 1040), many taxpayers find that they spend a lot of money on medical and dental care but wind up with little or no allowable deduction.

For more information about medical and dental expenses, see IRS Publication 502.

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