Cancer and Taxes - What You Need to Know

by GregP_WN

Tax time is here again! Who needs that now especially while you're having to deal with your cancer treatments, appointments, side effects and everything else that comes with a cancer diagnosis, right? As aggravating as it may be to file your taxes, it still has to be done, cancer or not. Here are 4 things you need to know.

Cancer And Taxes

1) Figure out which expenses you can deduct on your taxes. If you’ve been diagnosed with cancer you’ve probably spent a lot more on your healthcare this year. Chances are good that most of those medical expenses are deductible. The IRS takes a pretty generous approach to medical expenses, and everything from payments to doctors and surgeons to the costs of prescription medications, equipment, and supplies is considered deductible. So are premiums you pay for insurance that covers the expenses of medical care, nursing services, and ambulance rides. So figure which of your medical expenses are deductible and which aren’t. The IRS has a list of deductible and non-deductible expenses here.

Claim All The Medical Expenses

2) Get your paperwork together. Once you figure out what to deduct, go back to your medical records to collect some raw numbers on what you paid. Just make sure you have a receipt or statement showing the payment was made, and make sure you only deduct expenses you paid during the 2015 tax year (if you want to deduct expense for an earlier tax year, you’d need to file a Form 1040X, Amended U.S. Individual Income Tax Return).

All Your Expenses Match

3) Complete a Schedule A (Form 1040). You’ll want to get a copy of this Itemized Deduction worksheet to help figure out how much of your medical expenses you can claim. The basic formula is that you can deduct amounts more than 10% of your adjusted gross income (unless your birthday is before January 2, 1951; then it’s anything over 7.5%). So let’s say your Adjusted Gross Income is $60,000. Ten percent of that is $6,000. If your medical expenses came out above $6,000, you might be able to claim a deduction for your medical expenses.

4) Having trouble with Step 3? Turn to the professionals. If you’re fighting cancer, the last thing you need in your life is more stress. So gather all your records and dump them in the lap of a certified tax preparer or someone you trust. They can also help you negotiate some of the more unusual situations—like what happens if someone gave you a gift to help cover treatment costs or you’ve paid into an HSA account. You may have to spend a little money to save a little money, but look at it as buying peace of mind. If money’s tight, lots of municipalities offer reduced cost or free tax preparation in your community; check out your county’s website or visit your local library. The IRS also has a Volunteer Income Tax Assistance (VITA) program that offers free tax return prep for people who make less than $54,000 a year, have disabilities, or speak English as a second language. Check them out here.

Tax Preparation Help

If you want to learn more about what you can and can’t do, take a look at IRS Publication 502, Medical and Dental Expenses. And share your own tips and advice below to help your fellow What Nexters make this year’s tax time as stress-free as possible!

Do you have any tax prep help that pertains to cancer patients that may be helpful? Please post in the comments, and we wish you all the best with your taxes and your health!

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