An insurance deductible is the amount of money the insured has to pay before the insurer pays the costs. If you have a high deductible, you will have a low premium, and vice versa. Knowing this can help save you money. But did you also know that it is also tax-deductible?
Medical expenses can take away a large portion of your annual income. The Internal Revenue Service knows this and they decided to help U.S. citizens out. Thus, they allow taxpayers to deduct the cost of medical expenses that are more than 10% of their yearly adjusted gross income. Medical expenses can include your deductible.
But, be aware, some types of medical expenses, such as cosmetic surgery, are excluded.
How to claim a medical expense deduction
In order to claim a medical expense deduction, you have to itemize your tax deductions instead of taking the standard deduction. For some people, this way is more beneficial, for others, the other way is best. It all depends on your expenses.