disabled taxpayers who wish to deduct their medical expenses at tax time, generally must follow a unique set of rules to do so. Expenses related to the disability that fall under the category as necessary and ordinary business expenses include:
- Those necessary for you to perform your work in a satisfactory manner
- Goods and services which aren't required or used in your personal business, with the exception of incidentals
- Those expenses which do not fall under other income tax rules, specifically.
You must meet the IRS definition of disabled if you want to deduct your medical expenses. You're considered disabled if you meet any of the following conditions:
- You have a physical or mental disability (blindness or deafness, for example) that can limit your ability to be employed.
- You have a physical or mental impairment which significantly impacts daily activities such as walking, breathing, speaking, earning, working, and other manual tasks.
Disabled taxpayers who work are eligible to claim a business deduction for medical expenses they acquire to work. These expenses are not subject to the traditional 7.5% limitation applied to general medical expenses.
How to Report and Deduct the Expenses
As an employee, you'll first need to complete Form 2106, Employee Business Expense, or Form 2106-EZ, Unreimbursed employee business expenses. Next, you'll put the amount related to your disability, which you calculated on Form 2106, onto a schedule a (Form 1040), line 28. On line 21 of the Schedule A, you'll record the amount unrelated to your disability.
Disability-related work expenses aren't limited to the 2% adjusted gross income restriction that's applied to other employee business expenses.
self-employed and impaired taxpayers will use the appropriate form, either schedule c, C-EZ, E, or F) to report the business income and expenses