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Say I visit a specialist -- like an orthodontist -- without any insurance. I pay for everything out-of-pocket -- no insurance/deductibles/payment sharing plans/etc. I pay several thousands for the routine rounds -- evaluation, X-rays, retainer work, follow-ups, and etc. Can I write this off?

What is the gist of paying for all of your healthcare costs? Are they 100% refundable? Tax breaks?

I ask because I did some calculations and I can actually save money by paying out of pocket and stretching out the procedures over 9 months. Getting insurance + deductible + X-ray costs would require $300+ in monthly payments + hundreds for deductibles and copays for specific work.

The orthodontist told me that they can help with my jawline and improve my facial aesthetics too.

Out of pocket = ~$3,800 flat for everything.

Insurance = $2,400+ on monthly payments without the cost of anything else included. Not good!

I'll need about 7 visits and follow-ups -- and the plan will add aditional thousands based on this.

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    Don't forget that if you do not have health insurance, there is an additional penalty that you have to pay on your taxes (at least for now).
    – Ben Miller
    Nov 15, 2017 at 12:19
  • You should look into whether your employer offers HSA or other benefits that reduce your tax liability. Nov 17, 2017 at 0:08

2 Answers 2

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You can deduct the amount of your medical expenses that exceeds 10% of your Adjusted Gross Income. This is an itemized deduction, so in order to realize any benefit the total of all your deductions has to exceed the standard deduction.

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  • What does that translate to in English?
    – edwan wark
    Nov 15, 2017 at 4:59
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    It seems highly unlikely that you'd get any tax benefit from your medical expenditures. If you expect your income to be comparable to last year, then look at last years Adjusted Gross Income, there are a number of "should I itemize" calculators out there, there's no quick and easy answer, it requires a lot more information, but I'd wager you won't get any tax benefit from these medical expenses.
    – Hart CO
    Nov 15, 2017 at 5:06
  • @ShelfDancer - it means that unless your income is very low, none of the $3,800 is likely to be deductible. Nov 15, 2017 at 15:33
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    @jamesqf Even if you itemize though, your AGI would have to be below $38,000 to deduct any portion of the $3,800.
    – Hart CO
    Nov 15, 2017 at 18:56
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    @jamesqf - none of those things affect the deductibility of medical expenses. Nov 15, 2017 at 21:13
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You can deduct healthcare costs if you choose to itemize your deductions on Schedule A of your income tax return but only that part that exceeds 10% of your Adjusted Gross Income (7.5% for seniors). If your total itemized deductions (medical expenses above 10% floor, mortgage interest, property and state income (or sales) taxes, charitable donations, etc) do not exceed the standard deduction, you are better off claiming the standard deduction ($6.3K for singles, $12.6K for Married Filing Jointly) Of course, if you are married but filing separately (MFS), then you must itemize if your spouse chooses to itemize, and cannot claim the smaller standard deduction (half the MFJ deduction) available to MFS filers..

For most people, the AGI floor on medical expenses means that they cannot deduct any healthcare costs, either because the costs do not exceed the floor and so are not included in the total itemized deductions, or because the total itemized deductions do not exceed the standard deduction and so it is better to claim the standard deduction (if allowed).

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  • I do 1040 Profit or Loss.
    – edwan wark
    Nov 15, 2017 at 4:59

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