Deducting medical care expenses

SC&H Group experts also address business costs, e-filing, claiming parent

Tax Talk 2006 Q&A

March 26, 2006|By JIM WILHELM, STUART RUDO AND GREG HORNING | JIM WILHELM, STUART RUDO AND GREG HORNING,SPECIAL TO BALTIMORESUN.COM's tax-advice column features three experts from the Hunt Valley accounting firm SC&H Group answering questions about preparing your return every Monday until April 17. To be included in the following weeks, please use the form at the right side of this page to submit your questions.

Nancy M. Bandiere, Baltimore: Filing head of household for a mother in [an] assisted-living facility for her safety and welfare, what may I deduct other than [medical] expenses, [medical] premiums, [prescriptions], [prescription] premiums, administering [medicine] by staff [and] annual charge by facility for her room? Thanks.

SC&H Group: Additional deductions include expenses for dentists, eye doctors and physical therapists. Medical aids such as wheelchairs, hearing aids and eyeglasses are also deductible. Keep in mind [that] if the main reason for being in the facility is to obtain medical care, then all of the facility costs are deductible. If medical care is not the main reason, then only the portion of the facility costs related to medical treatment is deductible.

E.J., Columbia: [A] two-part [question]: First, my wife is co-president of a nonprofit organization for stay-at-home parents. She is not paid. Can she write off expenses such as for printing up fliers, travel to/from meetings, paying meals, etc.? If so, where on my taxes? Second, I'm a writer and recently traveled to London as part vacation, part research for a book I'm writing. What aspects of my vacation, if any, can I deduct, and where on my taxes?

SC&H Group: You need to determine the nonprofit organization's charitable status. If it qualifies as a charitable organization, you may deduct the expenses and travel (14 cents per mile) as a charitable contribution on Schedule A, Itemized Deductions. If the organization does not qualify as a charitable organization, you cannot deduct the expenses.

If we assume that you are a self-employed writer in a business with the requisite profit motive, the expenses that are ordinary and necessary for your book research may be deductible on Schedule C, Profit or Loss from Business. If the main purpose of the trip was vacation, only business-related costs incurred during the trip would be deductible.

If the main purpose for the trip was business, you can deduct the costs of going to and from London, and business-related expenses incurred during the trip. Nonbusiness side trips would be nondeductible. Expenses for nonemployees accompanying you on the trip would generally be nondeductible.

Donna, Wilmington, Del.: My mother was declared legally blind. Somebody told me that she is able to make a deduction on her taxes due to this disability. Is this correct?

SC&H Group: Yes, that is correct. Taxpayers who are age 65 or older or who are blind receive an additional standard deduction amount that is added to the basic standard deduction amount (for 2005, the basic standard deduction is $10,000 for married filing joint taxpayers and $5,000 for single taxpayers). The additional standard deduction due to age or blindness is $1,000 for married filing joint taxpayers and $1,250 for unmarried individuals.

Two additional standard deduction amounts are allowed to an individual who is both over 65 and blind. Generally, to qualify for the additional deduction, a taxpayer must be age 65 or blind before the close of the tax year.

A taxpayer claiming an additional deduction for blindness must obtain a certified statement from a doctor or registered optometrist. The statement, which should be kept with the taxpayer's records, must state that:

the individual cannot see better than 20/200 in the better eye with glasses or contact lenses;

or, the individual's field of vision is 20 degrees or less.

Keep track of any medical expenses related to her condition, as many extra or incremental costs associated with blindness may qualify as medical deductions.

Finally, Maryland provides similar additional deductions to blind taxpayers, as well as a subtraction from income related to expenses of hiring a reader.

Barbara, Catonsville: Can you still electronically file a [Form] 1040 if you have to send in additional documents such as the form required for the charitable donation of a car?

SC&H Group: You can electronically file (e-file) your return when certain attachments are required. You will not, however, be able to use the paperless e-file option.

You will need to complete Form 8453, U.S. Individual Income Tax Declaration for an IRS e-file return, and attach your Form 1098-C for the charitable donation of a motor vehicle. This form with attachments will be mailed into the IRS service center to complete your electronic filing. Other acceptable attachments to Form 8453 can be found on page 17 of IRS publication 1345A.

Jane, Bel Air: A parent lives with me all year. The only income he has is Social Security. Can I claim him on my taxes from my paycheck every week, and can I claim him at the end of the year?

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