Medical and Dental Expenses

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Discussion
Another commonly used type of itemized deduction available to taxpayers are medical and dental expenses. Taxpayers are able to deduct expenses paid for medical or dental care that they paid for themselves or their dependents. Note, however, that the deductible amount will be reduced by 7.5% of the taxpayer's adjusted gross income ("AGI"). The definition of medical expenses also includes amounts paid for preventative care.

Health insurance premiums are included as a deductible medical expense reported on Schedule A. If the insurance is paid by the employer, the amount will be reported on the taxpayer's W-2 and should not be deducted on Schedule A (as the amount is already excluded from the taxpayer's taxable income). Self employed individuals are also able to deduct health insurance premiums that they pay (reported on line 29 of Form 1040 - not an itemized deduction).

It's also important to be aware of the fact that medical and dental expenses will not provide a benefit to the taxpayer (excluding the exceptions mentioned above) unless the itemized deductions of the taxpayer exceeds the standard deduction for the year which will be increasingly difficult in 2018 when it is effectively doubled.

Example

Note that I removed the deduction for self employment taxes to better show the effect of the different situations.

References
https://www.irs.gov/taxtopics/tc502
https://www.irs.gov/newsroom/dont-miss-the-health-insurance-deduction-if-youre-self-employed

Disclaimer
Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.