Tax News

Medical Deduction Change for 2013 Federal Tax Return

Medical deduction change for 2013 federal tax return 

The rules are changing!

If you plan to itemize medical deductions on your 2013 federal tax return that you will file in 2014 please carefully track your medical expenses.

Beginning Jan. 1, 2013, you could claim deductions for allowable medical expenses not covered by your health insurance that exceed 10 percent of your adjusted gross income. This change affects your 2013 tax return that you will file in 2014. Previously the expenses needed to only exceed 7 ½% of your adjusted gross income.

You can most likely include medical expenses you pay for yourself, your spouse and your dependents. IRS Publication 502, Medical and Dental Expenses, contains additional information on medical expenses including how you figure and report the deduction on your return. You can deduct your medical and dental expenses as a deduction on your 2013 tax return. Simply follow the instructions to complete lines 1 through 4 of Schedule A, Form 1040 or give all information to your tax professional.

 

For recordkeeping, you should keep:

1. The name and address of each medical care provider you paid.

2. The amount and date of each payment.

3. A description of the medical care received.

4. Who received the care.

5. The nature and purpose of each medical expenses.

 

There is a temporary exemption from Jan. 1, 2013 to Dec. 31, 2016 for individuals age 65 and older and their spouses. If you or your spouse are 65 years or older or turned 65 during the 2013 tax year you are allowed to deduct unreimbursed medical care expenses that exceed 7.5% of your adjusted gross income. The threshold remains at 7.5% of AGI only for those taxpayers until Dec. 31, 2016.

Beginning Jan. 1, 2017, all taxpayers may deduct only the amount of the total un-reimbursed allowable medical care expenses for the year that exceeds 10% of your adjusted gross income.

 
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