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Tax Changes to Medical Deductions for Those Over 65

| November 08, 2016
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Tax Changes to Medical Deductions for Those Over 65

Changes to medical deduction for those 65 and older in tax year 2017

If you itemize your deductions on Form 1040, Schedule A, the threshold for unreimbursed medical and dental expenses you paid for yourself, your spouse, and your dependents must exceed 10 percent of your adjusted gross income before a deduction is permitted.

There is a temporary exemption for individuals age 65 and older until Dec. 31, 2016. If you are 65 years or older, you may continue to deduct total medical expenses that exceed 7.5 percent of your adjusted gross income through tax year 2016. If you are married and only one of you is age 65 or older, you may still deduct total medical expenses that exceed 7.5 percent of your adjusted gross income.

This exemption is temporary. Beginning Jan. 1, 2017, the 10 percent threshold will apply to all taxpayers, including those over 65.

We recommend maximizing your 2016 medical deduction:

Prescription drugs: Amounts paid for prescription drugs and insulin are treated as deductible medical expenses (but not over-the-counter medications). When possible, order the maximum prescription allowed by your physician and pay for it in 2016.

Regular doctor visits: As the year winds down, you might schedule routine medical and dental visits, such as physical exams and dental cleanings, in 2016. Remember that it will be much harder to clear the medical expense threshold in 2017.

Other tax updates:

The cost-of-living adjustment for Social Security in 2017 is .3%.Information on Medicare changes for 2017 have not been announced yet.

Beware of fake IRS Tax Bill Notices. The IRS has received numerous reports of scammers sending a fraudulent version of a notice labeled CP2000. These fake notices are related to the Affordable Care Act. If you receive any tax notice please let us know and we can review it.

 

Disclosures

Please consult your tax advisor for specific advice pertaining to your individual situation.

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