How To Increase Medical Tax Deductions for Older Taxpayers
New IRS medical expense rules for people age 65 and over reduce the amount of medical expenses you can deduct for the 2017 tax year (which you file in 2018). In 2017, you or — you and your spouse (if married) — can deduct the amount of unreimbursed allowable medical expenses that is more than 10% of your adjusted gross income (AGI). Last year people over the age of 65 were allowed to deduct medical expenses that were over 7.5% of the AGI.
For example, if you and your spouse were over the age of 65 in 2016 and had an AGI of $50,000, you could deduct the amount of allowable medical expenses over $3,750, which is 7.5% of $50,000. If your total medical expenses were $12,000 you could deduct $8,250 ($12,000 -$3,750 = $8,250)
But in 2017, if your AGI remains $50,000, you could deduct only allowable medical expenses over 10% of your AGI, or $5,000. If you again had medical expenses of $12,000, you would only be able to deduct $7,000 ($12,000-$5,000=$7,000). In this example you you would pay taxes on an additional $1,250.
To maximize your deductions, plan to take a quiet moment to organize your health expense paper work and get up to speed on allowable medical expenses. Even the most compulsive record-keeper can miss some. Remember that any unreimbursed premiums you pay for Part A (if any), Part B, Medicare Advantage Plans, Medigap and Part D plans are deductible. In addition, here are a few of the commonly missed deductions, but be sure to talk to a professional tax preparer or financial advisor to check the availability of any possible deductions for you:
- Transportation (taxi, bus, ambulance, train) or mileage to the doctor for yourself OR to transport others. Medical mileage was 0.19 per mile in 2016.
- Dental expenses (including routine exam and cleaning) not covered by dental insurance.
- Eye exams, eye glasses, and contact lenses.
- Cost of modifications to your home for medical reasons.
- Hearing aids and batteries.
- Payments for smoking cessation programs.
- Guide dogs or other service animals to assist a blind or physically disabled person.
For the complete details on medical expense deductions for 2017, see IRS publication 502 at IRS.gov.