H&W: IRS Releases Publications 502 and 503 for 2014 Tax Returns

The IRS releases Publications 502 and 503 for use in preparing 2014 tax returns. Publication 502 includes medical expenses that are deductible on a taxpayer’s 2014 return and Publication 503 covers the requirements necessary to claim the dependent care tax credit.

Several changes in Publication 502 for 2014 include:

  • Premium Tax Credit. You may be eligible to claim the premium tax credit if you, your spouse, or a dependent enrolled in health insurance through the Health Insurance Marketplace. See the instructions for line 69 in the Form 1040 instructions and Form 8962 for more information.
  • Advance Payment of the Premium Tax Credit. Advance payments of the premium tax credit may have been made to the health insurer to help pay for the insurance coverage of you, your spouse, or your dependent. If advance payments of the premium tax credit were made, you must file a 2014 tax return and Form 8962. If you enrolled someone who is not claimed as a dependent on your tax return or for more information, see the Instructions for Form 8962.
  • Standard Mileage Rate. The standard mileage rate allowed for operating expenses for a car when you use it for medical reasons is 23.5 cents per mile. See Transportation under What Medical Expenses Are Includible.

Some employers use Publication 502 as a guide for determining what expenses may be reimbursed under a Health FSA, HRA or HSA. Employers should use caution in using these publications beyond determining what expenses are deductible. The rules for reimbursing expenses from a health FSA, HRA or HSA may be different than for deducting the expenses on one’s taxes. For example, under Publication 502 an expense may be deductible the year in which it was paid; however, a Health FSA may only reimburse an expense in the year in which it was incurred.

Publication 502
Medical & Dental Expenses
Publication 503
Child & Dependent Care Expenses


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