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TAX DEDUCTIBLE MEDICAL EXPENSES

23/11/2013

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-medical care; includes dental, mental, and hospital

-prescription drugs and insulin

-special equipment: wheelchairs, crutches, artificial limbs, eyeglasses, hearing aids

-transportation for medical care

-medical and hospital insurance premiums

-longterm care insurance premiums(subject to limitations)

-cost of drug and alcohol rehabilitation

-certain costs to stop smoking

-weight reduction programs related to obesity

Note, that your expenses for these items will need to be over 10% of your AGI and you also must be itemizing your deductions for this to be a benefit, in a calendar year.  Here's a theoretical example...

Your AGI is $50,000 and your medical expenses were $7,000.  10% of your AGI is $5,000, so $5,000 - $7,000 will be how much you can add to your itemized deductions.  If you're in the 25% marginal tax bracket, these medical expenses would save you $500 on your taxes (2,000 x .25).  

Pretty weak, but $500 is better than $0.  If you're over the age of 65 I believe, then the threshold goes from 10% down to 7.5%.

-CC

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    This website was created due to the atrociously misguided financial advice that I've heard over the decades.  Financial freedom is not intellectually strenuous, but it takes discipline. 

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