When it comes to medical and dental expense deductions, many taxpayers simply throw up their hands in despair and give up. It’s no wonder: As a general rule, you won’t qualify for a deduction unless your adjusted gross income (AGI) is low and your expenses are high, due to an annual threshold. You might not even bother to figure things out.
However, as year end approaches, take another look at your records. You could be closer to a deduction in 2016 than you think. Just a few extra expenditures before the end of the year could push you past the breaking point.
Start with this basic premise: You’re entitled to a deduction for unreimbursed medical and dental expenses only to the extent the annual total exceeds 10 percent of your AGI. This threshold was raised from 7.5 percent of AGI in 2013 as part of the Affordable Care Act. Taxpayers age 65 and older can still claim deductions based on 7.5 percent of AGI, but the Affordable Care Act eliminates this tax reprieve at the end of this year.
Suppose you’re age 50 and have an AGI of $100,000 and unreimbursed medical and dental expenses of $9,000. In this case, you get no deduction in 2016 as things stand now.
Before giving up hope altogether, scour your bank account and credit card statements to see if you’re counting all your qualified expenses. The list includes health insurance premiums paid out of your own pocket, as well as deductibles.
And don’t forget about other common expenses like prescription drugs and transportation paid to acquire medical treatment. In lieu of deducting actual auto expenses, you can rely on a flat-rate deduction of 19 cents per mile (plus tolls and parking fees) in 2016. If you travel long distance, you can deduct airfare and reasonable lodging costs for you and a traveling companion.
About Ken Berry
Ken Berry, Esq., is a nationally known writer and editor specializing in tax, financial, and legal matters. During his long career, he has served as managing editor of a publisher of content-based marketing tools and vice president of an online continuing education company. As a freelance writer, Ken has authored thousands of articles for a wide variety of newsletters, magazines, and other periodicals.