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Search for deductible medical expenses

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Ken Berry

by on
in Small Business Tax,Small Business Tax Deduction Strategies

Thanks to a temporary reprieve in the Tax Cuts and Jobs Act (TCJA), it’s easier to qualify for an itemized medical expense deduction on your 2018 return. But this may be your last chance.

Strategy: Leave no stone unturned to find deductible medical expenses. If you search your records thoroughly, you may be pleasantly surprised.

Here’s the whole story: Previously, medical expenses were deductible only above 10% of your adjusted gross income (AGI). But the TCJA lowers the threshold to 7.5% of AGI—the floor in effect prior to the Affordable Care (ACA)—retroactive to 2017 and through 2018. In 2019, the threshold reverts to 10% of AGI.

Qualified medical expenses include payments for the diagnosis, cure, mitigation, treatment or prevention of disease, and payments for treatments affecting any structure or function of the body. This includes health insurance premiums. Other common deductible expenses include:

1. Visits to doctors, dentists, ophthalmologists, surgeons, chiropractors, psychiatrists, psychologists and other medical practitioners.

2. In-patient hospital care or nursing home services, including the cost of meals and lodging charged by the hospital or nursing home.

3. Acupuncture treatments or inpatient treatment at a center for alcohol or drug addiction, participation in a smoking-cessation program and drugs to alleviate nicotine withdrawal if they require a prescription.

4. A weight-loss program for a specific disease or diseases, including obesity, diagnosed by a physician (but usually not for health food items or payment of health club dues for general health).

5. Insulin and prescription drugs.

6. False teeth, reading or prescription eyeglasses or contact lenses, hearing aids, crutches, wheelchairs and guide dogs for the blind or deaf.

7. Transportation to obtain necessary medical treatment, such as fares for taxis, buses, trains and ambulances. If you use your own vehicle, you can deduct the portion of actual costs attributable to medical travel or a standard rate of 18 cents per mile in 2018 plus tolls and parking fees (increasing to 20 cents per mile in 2019).

Tip: Remember that medical expenses are deductible only if you itemize.

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