Medical expenses: year-end tax strategy

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in Small Business Tax

If you’re like most taxpayers, you normally don’t qualify for medical expense deductions. Reason: The expenses are deductible only to the extent that they exceed 7.5% of your AGI. Unless you’ve incurred a substantial one-time expense this year, you probably won’t even bother to check.

Strategy:
Scour your checkbook and credit card statements. You may discover enough qualified expenses to put you over the 7.5% mark for 2009. Don’t forget to count health insurance payments, including deductibles and co-pays, as well as travel expenses to obtain medical care. (The deduction for lodging is limited to $50 per day.)

If you discover you’re close to the 7.5% threshold, schedule nonemergency medical and dental visits for yourself and your family this year.

On the other hand, if you will come up short in 2009 no matter what, you may as well postpone nonemergency expenses to next year. That will give you a better shot at a medical deduction in 2010.

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