Tuesday, August 16, 2011

DEDUCTING MEDICAL EXPENSES

Many taxpayers, including those who itemize, do not keep track of their medical expenses during the year because they are aware that such expenses are only deductible on Schedule A to the extent the total exceeds 7½% of their Adjusted Gross Income (AGI), and they assume that because of this they will never have enough medical costs to be able to get a tax benefit.

However they should be keeping good records of all medical outlays during the year. Many would be surprised at the total they incur. And, as is the case in New Jersey (where medical expenses are deductible in excess of 2% of NJ Gross Income), they may be able to claim a deduction on their state income tax return.

These taxpayers may also be surprised to know just what they can deduct as a medical expense.

For example, here is a list of some more unique medical deductions from my special report ITEMIZED DEDUCTIONS – A COMPLETE GUIDE TO SCHEDULE A (2011 EDITION) –

· Acupuncture
· The “additional” costs of special food products to alleviate a specific medical condition
· Clarinet lessons to treat a dental condition
· Commuting to work when employment was prescribed as therapy to treat a medical condition
· An exercise or weight-loss program to alleviate a specific medical condition (including obesity)
· Lead paint removal if a child has been poisoned from eating the paint
· Legal fees paid to authorize treatment for mental illness
· Lamaze and other childbirth preparation classes
· A mattress and board to alleviate an arthritic condition
· A reclining chair for a person with a cardiac condition
· Therapeutic swimming costs
· A trained cat to provide an alert of unusual sounds for the hearing impaired
· A wig for the mental health of a patient with hair loss caused by disease
· Whirlpool baths prescribed by a physician

My Guide has an extensive and detailed section on just what you can, and cannot, deduct as a medical expense on Schedule A. It also contains several specialized worksheets to help you keep track of these costs during the year, and a summary worksheet to give to your tax preparer at tax time (instead of a shoe box of receipts).

My recommendation to you – by the Guide (hey, I can’t give everything away!). Click here for more details (FYI the guide was recently updated to include a new section on keeping track of gambling losses).

As a special incentive, if your order is postmarked by September 15th and you write ‘THE WANDERING TAX PRO SPECIAL DISCOUNT” in the lower left hand corner of the envelope you can have the Guide for only $5.45!


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TTFN

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