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Warning! Threshold for Medical Expenses Tax Deduction Has Increased

As many people know, medical care can be a costly endeavour; something that present a considerable challenge to nearly anyone. Regardless of whether medical expenses resulted from a car accident, a slip-and-fall or long-term illness, the out-of-pocket costs can climb quickly, making it extremely difficult to cover one’s finances.

Though the IRS does allow individuals potential deductions on qualifying medical expenses that aren’t reimbursed or covered by their insurance company, there are certain rules in place that every taxpayer must follow in order to quality for such deductions.

To start, a taxpayer has to itemize their tax deductions to make use of the healthcare expense write-off.  Additionally, there are new qualifying thresholds recently imposed by the IRS. For an individual looking to itemize medical expenses during the 2017 tax season (on their 2016 return), qualifying expenses have to exceed 10% of that person’s adjusted gross income. This threshold increased from 7.5% to the present-day 10% in 2015, though taxpayers were still only required to meet the 7.5% for medical expenses through the year 2016.

Currently (2017), taxpayers of all ages must now meet the 10% threshold in order to claim the medical expenses deduction. Because of this, it is very important to hold onto all invoices, receipts and any other documents pertaining to one’s medical expenses, and to sum up all of those expenses to make sure this new threshold is reached before claiming the deduction.

Medical Expenses That Qualify

Not all medical expenses qualify for the deduction, though there are many health-related and medical expenses that can be claimed, including for taxpayers, their dependents and their spouses. These include:

  • Hearing aids
  • Artificial limbs and prosthetics
  • Insurance premiums
  • Acupuncture and numerous other holistic treatments
  • False teeth
  • Alcohol or drug treatment
  • Eyewear
  • Medical fees
  • Guide dogs for the deaf and blind
  • Prescriptions
  • Special education
  • Psychiatric care
  • Quit Smoking programs

Medical Expenses That Don’t Qualify

The following expenses, however related to an individual’s well-being or health, don’t qualify for the deduction:

  • Funeral expenses
  • Life insurance premiums
  • Cosmetic surgery
  • Gym memberships
  • Nutritional supplements
  • Non-prescription drugs

It’s recommended that the taxpayer consult a professional tax preparer should they be planning on pursuing the medical expenses deduction. By doing so, the individual may better understand the steps involved, and may better prepare themselves with the correct documentation needed to do so.

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