In today’s discussion of the health care reform act legislation that will take effect in 2013,
today’s segment covers itemized deductions for medical expenses. According to the Patient Protection and 2010 Reconciliation Acts, the threshold to claim an itemized deduction for unreimbursed medical expenses will increase from 7.5% to 10% of AGI for regular income tax purposes. This goes into effect for tax years beginning after December 31, 2012.
today’s segment covers itemized deductions for medical expenses. According to the Patient Protection and 2010 Reconciliation Acts, the threshold to claim an itemized deduction for unreimbursed medical expenses will increase from 7.5% to 10% of AGI for regular income tax purposes. This goes into effect for tax years beginning after December 31, 2012.
Expenses for medical care include amounts paid for the diagnosis, care, mitigation, treatment, or prevention of disease and for treatments affecting any part or function of the body (Code Sec. 213 (d). Only payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners qualify as medical expenses. The provision also outlines additional expenses that qualify. This means that for a taxpayer making $40,000, they must now have medical expenses of $4,000 ($40,000* 10%) where they previously needed $3,000 ($40,000 * 7.5%) in order to reach the threshold amount. Taxpayers will essentially now need an additional $250 per $10,000 of income to meet the threshold requirements for the itemization of these expenses. This could have a large impact on people with significant medical expenses who itemize their deductions.
Please contact your tax advisor on how this might impact your specific tax situation.
This is a continuation, from Part 2 located here
http://exactcpa.blogspot.com/2012/12/allowable-contributions-to-health.html
Which is a continuation, from Part 1 located here
http://exactcpa.blogspot.com/2012/12/what-does-2013-mean-for-you-in-terms-of.html