It’s never too early to start looking at expenses that can be written off taxes, and this time around we’re going to look at medical expenses.
One reason medical expenses might be a bit different this year is because of implementation of the Affordable Care Act. While there has been no official notification of changes to last year’s policy, it’s possible that more people will have the ability to write off something this year.
The policy last year was that in order to write off anything on taxes regarding medical expenses you had to have paid at least 10% of your income. This meant that if you earned $50,000 for the year you had to have spent at least $5,000 to get any benefit.
This year, since more people have purchased insurance via government exchanges, more people are probably going to get close to that threshold, if not surpass it, especially if they didn’t qualify or accept any government adjustments. Since most plans across the country started around $425, this means many people will have paid at least $5,100 in premiums alone. Add to that anything paid out of pocket towards medical bills and there could be significant adjustments allowed this year.
That’s if last year’s 10% holds, and right now it seems to still be out there, although it’s possible there could be an adjustment. It’s doubtful the adjustment would go up, so if the percentage amount goes down even more people would qualify for a tax benefit.
Also, if you’re self employed you get to write off health premiums as a business expense, which is a greater benefit even if you paid it out of your personal bank account.
By the way, medical expenses cover a few things you might not have thought of such as long term care insurance premiums, hearing aids, glasses, contact lenses and solutions, costs for prescription drugs and even band-aids. This means you should keep receipts for almost everything you spend, including dental bills. If you want more information on the types of things you might be able to write off, click here.
