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Can I deduct Mom’s medical expenses?

by on
in Small Business Tax,Small Business Tax Deduction Strategies

Q: My mother has extensive medical expenses that aren't fully covered by insurance. But the tax deduction doesn't do her much good because her income is low. Can I deduct the expenses if I pay them for her? L.L., Bangor, Maine

A: You can deduct medical expenses paid on behalf of a relative if you're entitled to claim that relative as your dependent. Even better, this rule applies if the only test for dependency exemptions you fail to meet is the "gross income test." For 2005, you can't claim an exemption for a relative with more than $3,200 in gross income subject to tax. However, if Mom earns more than that, you may still be able to deduct medical expenses paid for her if you provide more than half her support and she doesn't file a joint tax return. Tip: Even if you qualify, remember that you can only deduct medical expenses above 7.5 percent of your AGI.

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