Pub. 502 (Medical and Dental Expenses)
The 2004 version of Publication 502 (Medical and Dental Expenses) has been released. Although the purpose of this Publication is to help taxpayers determine what medical expenses are deductible on their tax returns, Plan Administrators often use it to decide what expenses are eligible medical care. Please be cautious when using it for this purpose because the Publication does not take into consideration restrictions which may apply to Flexible Spending Accounts, Health Savings Accounts, and Health Reimbursement Accounts.
Following are changes and additions which may be of particular interest to you.
Transportation. The standard mileage rate for 2004 is 14 cents a mile when the automobile is used to obtain medical care.
Medicine and Drugs from Other Countries. As of now, the cost of a prescribed drug brought in (or ordered to be shipped) from another country is not a deductible expense because the drugs would not be imported legally. (This may change.) However, prescription drug costs are deductible if they are purchased and consumed in another country if the drug is legal both in that country and the USA.
Medical Expenses Reimbursed through an HSA. Medical expenses reimbursed by an HSA are not deductible.
Medical Expenses Reimbursed through a FSA. Medical expenses reimbursed by an HSA are not deductible. (This exclusion is not new, but it is the first time it has been stated in this publication.
Click here for a copy of Publication 502 (2004 Version).