Tax-filing season starts next month. Can you deduct mileage for medical expenses? That’s the question a woman from Pawtucket asked MoneyLine:

Q: If you’re doing the 1040 form and someone has a catastrophic illness and you are taking them back and forth to the doctors almost daily, and then weekly, and then bi-weekly – two or three doctors a week – is the mileage . . . tax-deductible, or is there a percent, like 5 percent, that might be tax-deductible? I put an awful lot of miles on my car and I saved all the appointment cards for all of the doctors, taking my husband back and forth. He was diagnosed with leukemia, and it’s been one thing after the other, and I thought maybe this gas money or a portion . . . would be tax-deductible . . . .

— A.D., Pawtucket

A: It is. And that’s good news for you and so many other unsung heroes who devote a big chunk of their time and effort to care for ailing family members or friends.

Unfortunately, you’ll have to clear some hurdles to claim the tax break. Some background:

Federal tax law generally lets you claim a deduction for expenses that you pay for the medical care of yourself, your spouse or dependent — expenses for which you’re not compensated by insurance.

As part of the expenses, you get to count the cost of transportation that’s primarily for (and essential to) medical care.

In general, you may calculate your deduction by using a standard rate for each mile you drive (it’s 20 cents a mile for this year), or by figuring the portion of your actual expenses that relate to medical transportation. (The actual expenses in this case would include such items as gasoline and oil.)

Because the standard mileage rate is a more convenient method, that’s what many people use, said Robert J. Sclama, who teaches taxation at Bryant University’s financial-planning program.

But it’s best to figure expenses both ways, and use whichever method will result in a bigger deduction — and save you more in taxes, said Sclama, who runs his own tax-consulting and financial-planning practice in North Providence.

Here’s an example, adapted from one provided by the Internal Revenue Service:

Maria drove 2,800 miles for medical reasons this year. For those trips, she calculated that she spent $250 for gas, $5 for oil, and $50 for parking and tolls. Thus, her actual expenses for those trips totaled $305.

She then calculated her expenses using the standard mileage rate. They totaled $610. (For this purpose, she was able to claim 20 cents for each of the 2,800 miles she drove, which came to $560. She then added $50 for parking and tolls.)

Therefore, on her federal income-tax return next month, she’ll be prepared to count $610 in deductible expenses for medical transportation.

But will Maria actually see a tax benefit? It depends.

To claim a medical expense deduction, you must make a separate list of all your deductions, a process known as itemizing, which is done on Schedule A of your Form 1040. (So you can’t deduct medical expenses if you also claim the lump-sum deduction known as the standard deduction, which is what most taxpayers do.)

Even if you itemize, however, you’re still not home free. In general, you’re allowed to deduct only those medical and dental expenses which exceed 7.5 percent of your adjusted gross income. (For most taxpayers, adjusted gross income is the same as gross income. It’s a figure on the front of your return, toward the bottom. Use the figure on last year’s return as a guide.)

So if your adjusted gross income is, say, $40,000, you’d be able to deduct only those medical and dental expenses that exceed $3,000.

Don’t forget, though, that you get to count a lot of things toward that threshold, including the medical transportation expenses mentioned above, as well as doctor’s bills, hospital services, medicines, nursing services, prescription drugs, insurance premiums, and other items for which you receive no insurance reimbursement.

Other points:

• The Internal Revenue Service adjusts the standard mileage rates from time to time. Last week, the IRS set the new rates for 2008. The standard rate for the business use of a vehicle will be 50.5 cents a mile next year, up from the current 48.5 cents. But the standard rate for medical and moving expenses will drop to 19 cents a mile from the current 20 cents a mile. (The rate for charitable use of a vehicle will remain at 14 cents a mile.) The IRS bases the standard rates for business, medical and moving expenses on an annual survey conducted by a third party, IRS spokeswoman Peggy Riley said. The charitable rate is fixed by law; only Congress can change it.

• The rules regarding the medical and dental expense deduction are too numerous to list here. For more information, read IRS Publication 502, “Medical and Dental Expenses.” For a free copy, visit your local IRS office, call the IRS toll-free at 1-800-829-3676, or use this Web site:

www.irs.gov/formspubs

• In general, you’ll get a tax break on your Rhode Island income-tax return for medical expenses that you deduct on your federal return.

Q: I will become 70 1/2 in 2008. I would like to know what publication I can order from the IRS to know how to withdraw my funds. . . .

— B.K., Richmond

A: It’s IRS Publication 590, “Individual Retirement Arrangements (IRAs).” Your local IRS office may have copies available. If not, call the IRS toll-free at 1-800-829-3676 to have a copy mailed to you at no charge. Or download a copy from this IRS Web site:

www.irs.gov/formspubs

The financial institution that serves as the trustee or custodian of your traditional IRA will help you calculate how much to withdraw, but it’s also a good idea to do the calculation on your own.

Your first such required withdrawal must be made by April 1 of the year following the year in which you turn 70½. However, it’s sometimes a good idea to make that first required withdrawal in the year you turn 70½.

TODAY’S TIP: Shouldn’t high school students be taught how to handle credit cards? Understand what banking, investing and mortgage loans are all about? Learn how to run a household budget, and how to live within their means?

A special legislative commission in Rhode Island is getting organized to study youth financial education. And one of the things the group will be looking at is requiring that financial literacy courses be taught in schools.

Sounds like a great idea. Credit goes to the General Assembly, and, in particular, to state Sen. Daniel J. Issa (D-Central Falls) and state Rep. Raymond C. Church (D-North Smithfield), who sponsored legislation to create the commission.

“Financial literacy — which means more than just knowing how to balance a checkbook — is a vital step toward ensuring the well-being of our youth as they move into adulthood,” Issa said in a statement. “The consequences of inadequate financial literacy can be serious.”

Church said, “We cannot assume students are becoming financially literate just because they have math classes. We have to make sure young people have the proper financial education to serve them in their years out of school.”

The 15-member study commission is to report back to the General Assembly next year.

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