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Year-end strategy: Put medical expenses on your tax calendar

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in Small Business Tax

If your income is high, it’s unlikely you can deduct medical expenses. Reason: These expenses are deductible only to the extent they exceed 7.5% of your AGI.

Strategy: Figure out whether your best shot at a deduction is this year or next year. Then schedule nonemergency medical and dental visits accordingly.

Example: If you’re already over the 7.5% mark for 2008—or close to it—arrange to have your family’s physicals and dental cleanings done before Jan. 1. On the other hand, if there’s no way you’ll clear the 7.5%-of-AGI mark in 2008, you may as well postpone the visits past Dec. 31. This increases your chances for a medical deduction in 2009. 

Tip: Add the medical expenses paid on behalf of a relative to your total if you provide more than half of his or her annual support.

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