This means a lot to our clients as most of the care we provide is a medically necessary expense. And it means a lot to me, especially this year! Between having surgery with way more copays and deductibles than I was expecting and now a torn meniscus, acupuncture (yes it really helps me), annual preventative testing and checkups, and paying for our parent’s home care we are easily meeting the threshold.
How are medical deductions effected by the new Tax Cuts and Jobs Act? During 2017 and 2018 medical expenses are deductible to the extent they exceed 7.5% of your AGI (adjusted gross income). In 2019, the threshold will increase to 10% of your AGI.
The most important task for everyone will be to accurately maintain a record of all deductible medical expenses. Take the time now to review IRS Publication 502, Medical Expenses. This is actually an easy read and will help you prepare appropriately for when you meet with your tax advisor.
Tax planning tip for 2018! Get a credit card to use just for medical expenses. Pay all copays, premiums, deductibles, home care, assisted living care, nursing home care, etc.…. with the same credit card all year long. This will be very beneficial with itemizing your medical expenses for tax purposes. It helps you maintain an accurate record of actual medical expense.
If you need any type of long term care assistance you can see how quickly medical expenses can add up and quickly take an individual over the threshold. Just your Medicare expenses alone may take you over the threshold. Most folks don’t pay a Medicare Part A premium and the Part A deductible is $1,340 for each benefit period plus copays, Medicare Part B premium is determined by your income and the annual deductible is $183 plus copays, Part C and D premiums, deductibles and copays vary by plan. Expenses add up quicker than you think.
Home care can help you stay in your home. Most of all it helps you eliminate doing tasks in the home thereby limiting the opportunity for an injury to occur. Think about putting that fitted sheet on your bed and how hard it is to get over that last corner. How many times have you almost fallen making the bed? Our help prevents those close calls, we look forward to hearing from you and your clients and the opportunity to help folks enjoy their own home.
Learn More on How You Can Position Yourself to Take Advantage of The Tax Bill