11 Apr Bunch medical expenses to enjoy a deduction
Case Study I
Kevin and Sarah incurred what they thought were a lot of medical expenses in 2014, so when they met with a tax advisor about filing their return, they were surprised to learn that they couldn’t deduct any of them. The advisor explained that medical expenses can be deducted only to the extent that they exceed 10% of adjusted gross income (7.5% for taxpayers age 65 and older) The couple’s 2014 expenses didn’t exceed that floor.
The advisor suggested that, for 2015 and 2016, Kevin and Sarah consider “bunching” non-urgent medical procedures (and any other services and purchases whose timing they can control without negatively affecting their health) into one year to exceed the 10% floor. Eligible expenses may include·
Health insurance premiums,
Long-term care insurance premiums (limits apply),
Medical and dental services,
Prescription drugs, and
Mileage (23 cents per mile driven for health care purposes).
Expenses that are reimbursable by insurance or paid through a tax-advantaged account aren’t deductible.