When most people think of tax-deductible medical expenses, they often think of major surgeries, dental work, and prescription drugs. But for those battling substance abuse, rehabilitation stays and other treatment methods constituent major medical expenses. Are these classified as tax-deductible medical expenses by the IRS? Let’s take a look.

First, let’s briefly discuss which medical expenses are classified as tax-deductible by the IRS. A taxpayer can deduct their medical expenses that were paid during the taxable year and not reimbursed by insurance, as well as those of their dependent, spouse or medical dependent. This can include things like preventative care, treatment, surgeries, vision & dental work, visits to a psychologist, prescription medication, hearing aids and more. You can also deduct the travel mileage or bus fares to and from your medical treatments. What’s generally not allowed as a deductible expense? Things like cosmetic procedures, non-prescription medication, and general health purchases like toothpaste, gym fees, etc. don’t count as deductions.

What actual deduction you will receive varies based on your income. The IRS allows you to deduct all unreimbursed medical expenses that exceed 7.5% of your adjusted gross income if itemizing your deductions via Schedule A. So if 7.5% of your income is $10,000 for example, you can only deduct the portion of your medical expenses that exceeds that. If your medical expenses are $15,000, you would be able to deduct $5,000.

Drug and alcohol addiction is classified as a medical condition and therefore the treatment associated with it can be a legitimate medical expense that is tax-deductible. Some of the costs that would be tax-deductible include things like your payment for a stay in an inpatient or outpatient facility (including food and lodging), visits to doctors, psychiatrists or psychologists, transportation to and from a medical facility, and medication that has been prescribed in relation to your condition. The mileage costs associated with Alcoholics Anonymous meetings, if determined by your doctor to be necessary for rehabilitation, can also be tax-deductible. A medication like Nicotine can be deductible as long as it is prescribed by your doctor. You can deduct these costs for yourself, your spouse or a dependent.

Treatment for drug and alcohol addiction can be cost-prohibitive for many people, with insurance only covering 50% to 80% of the bill. Navigating the maze of medical expenses and insurance can be tricky. So can figuring out tax deductions and the tax code. Putting them both together can be a nightmare! Don’t let that stop you from receiving the deductions you deserve. At ClarkSilva, we’re well-versed on helping you handle medical deductions as well as any other tax related matters. If you have any questions, reach out to us today!