MEDICAL EXPENSES THAT ARE DEDUCTIBLE

MEDICAL EXPENSES THAT ARE DEDUCTIBLE

Medical expenses that are deductible. The first thing that one should realize when considering whether to take the standard deduction, or to itemize your medical expenses is this, if you itemize your expenses you absolutely have to have receipts to show those expenses. Otherwise if the IRS disallows your expenses and or audits you and you have no records, they may claim you are inflating false, unverifiable expenses and you can get hit with penalties for filing a false return. Generally speaking, most all medical expenses are deductible on a tax return, the only question to be answered is this, do those expenses add up to over 7.5 percent of the taxpayers Adjusted Gross Income, or AGI. If they do add up to over the 7.5 percent mark, then you can itemize them instead of taking the standard deduction. This works best for those with very large or catastrophic medical expenses, and that is what it is designed for. Medical expenses that are deductible.

Last year nearly 127 million Americans claimed the standard deduction on their tax return. That is not to imply that that was the number who had large medical expenses. That number is much smaller. The standard deduction usually goes up every year, accounting for inflation, and some years when inflation is higher than others, it goes up even more than usual. It was $12,950 for individuals and $25,900 for married couples filing jointly. For those aged 65 or older, the standard deduction was $14700 for an individual and $27,300 for married couples filing jointly.

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So to determine which would work best, you need to add up your verifiable medical expenses, those you have a receipt for, and then determine which is greater, the standard deduction or itemizing because your expenses are greater than the standard deduction. If you cannot do that yourself on your IRS return, you can contact a good Tax Resolution Company for Tax Resolution Services.