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Here's a New Tax Prescription for Medical Expenses

2/12/2018

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The new tax reform law — the Tax Cuts and Jobs Act (TCJA) — preserves the deduction for medical expenses, unlike many other itemized deductions. But that's only part of the good news for itemizers. The TCJA also temporarily rolls back the threshold for deducting medical expenses to 7.5 percent of adjusted gross income, from 10 percent.


This change applies to the 2017 and 2018 tax years. In other words, it's retroactive, so you still may benefit on your 2017 return.


How to determine your medical deduction for the year


Add up all your unreimbursed expenses that qualify as medical care. This can range from payments for doctor and dentist visits to prescription drugs and equipment like wheelchairs. If the total exceeds the tax law threshold, you deduct only the excess. Otherwise, you get no deduction.


Now that the new tax law lowered it to 7.5 percent of adjusted gross income, it's easier to qualify for a deduction. Here's what you can do:


  • For 2017: Go back over your records to see if any deductible expenses have fallen through the cracks. Those extra expenses may be enough to push you over the 7.5 percent mark or increase an existing deduction.
  • For 2018: Because of the lower limit, this may be the last year you qualify for a medical deduction. Try to schedule routine expenses such as medical exams and dental cleanings before the end of the year. Or you may decide to undergo that surgery you've been putting off.

This may represent your last opportunity to claim a medical deduction, especially if you don't expect to itemize deductions in coming years. If you have tax questions about medical deductions or anything else, give us a call today.
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"Tax Tips" are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720


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Phone: (630) 320-3720

Monarch Accounting Group Inc
145 Tower Drive, Suite 10
Burr Ridge, IL 60527-7836
Email: [email protected]


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  • Home
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