“Can my dental expenses be deducted on my tax return?”
The short answer is likely no. Dental expenses were phased out by the ATO in 2014/15.
If you have an overdue tax return from prior to 2014 and records of dental expenses you wish to claim, please read on to learn more.
For everyone else, unfortunately dental expenses are no longer able to be claimed on your tax return.
The Specifics for dental expense claims in 2014 (and earlier)
For tax purposes, the Australian Tax Office lumps dental expenses together with other medical expenses. Unfortunately, this means you can’t claim back your dental expenses ‘dollar for dollar’ – but there are some savings to be had.
If you have more than $2060 net medical expenses (your total medical expenses minus Medicare and private health rebates) within one tax year, you can claim 20% of the amount above $2060 as a deductible expense.
Example 1:
- John spends a total of $2500 on dental and medical bills in the tax year
- John received a total of $450 back from Medicare and $900 back from private health insurance
- John’s net medical expenses = $2500 minus $450 (Medicare rebate) minus $900 (private health) = $1150
- Because John’s net medical expenses are less than $2060, John can’t claim any medical expense deduction on his tax return
Example 2:
- Mary spends a total of $7000 on dental and medical bills during one tax year
- Mary received $875 back from Medicare and $2500 back from private health insurance
- Mary’s net medical expenses = $7500 minus $875 (Medicare rebate) minus $2500 (private health) = $4125
- Mary’s net medical expenses are more than $2060, so she can claim 20% of the amount above this threshold as a deduction
$4125 (net medical expenses) minus $2060 (ATO threshold) times 20% = $413 - Mary can claim $413 as a tax deduction on her tax return
What dental expenses can you can claim on your tax return:
- Payments to dentists, orthodontists or registered dental mechanics
- Payments to optometrists, including prescription glasses and contact lenses
- Payments for medical aids prescribed by a doctor
- Payments for laser eye surgery
- Payments for artificial limbs or eyes and hearing aids
What you can’t claim on your tax return:
- Payments to a private health provider for insurance
- Travel or accommodation expenses associated with you dental treatment
- Dental services that are purely cosmetic
- Non-prescription, chemist-type items sold ‘over the counter’ such as tablets for pain relief
The best way to keep track of your medical expenses
Each time you pay a dental or other medical bill, keep the receipt! File tax receipts somewhere safe and simple to make things easy for you at tax time.
At the end of the financial year, you can also ask for an itemised statement from Medicare, your private health insurer and the chemist where you’ve had your prescriptions filled. Then it’s just down to some simple maths to work out your net medical expenses.
Are you unsure about what you can and can’t claim as a dental or medical expense? Send us an email on [email protected] or leave us a comment over at our Facebook page.
We’ve also created a dental expenses fact sheet. Feel free to print this useful tool off and share it with those you think will benefit from it!
