The threshold for claiming the medical-expense deduction is 7.5% of adjusted gross income for 2017 and 2018, potentially letting more people qualify. Sarah O’Brien explains
- A taxpayer with adjusted gross income of $50,000 would need a minimum of $3,750 in medical expenses to reach the temporary 7.5 percent threshold. That compares with $5,000 — $1,250 more — at a 10 percent floor, which will be in effect in 2019.
- About 8.8 million taxpayers used the deduction in 2015, saving themselves an aggregate $86.9 billion.
- Some qualifying expenses are more easily overlooked, including the cost of getting you and your dependents to doctor’s appointments and the like.
BUT… and this is a BIG “BUT” due to the increase in the standard deduction, far fewer taxpapers will itemize their deductions. For 2018 the standard deduction has nearly doubled for all taxpayers. The 2018 standard deduction for married couples filing jointly is $24,000, up from $12,700 in 2017. So, unless the total of all deductions exceeds $24,000, there is no benefit to itemizing. And even if your deductions exceed the SD, you only benefit from the amount in excess of the SD. And with lower tax rates of 10-12% for most taxpayers, the amount you save by itemizing is lower than in the past.
Read full article at: https://www.cnbc.com/2018/03/20/the-medical-expense-deduction-is-lower-for-2017-and-2018.html
Source: Financial Planning for Women