Year-End Tax Checkup: Maximizing Post-Reform Medical Deductions

The end of the year is here! This is time for clients to perform their annual end-of-year tax checkup and evaluate whether any year-end action steps could help reduce their tax bill for 2018. The recent tax reform changed the calculus for many taxpayers this year and introduced new savings opportunities for some.

This year only medical expense deductions could be particularly valuable for many taxpayers, but they have to act now – ending January 1, 2019, taxpayers can take advantage of a 7.5% floor rather than 10%. This means that they will be entitled to deduct medical expenses to the extent that they exceed 7.5% of adjusted gross income (AGI).

The medical expense deduction with revert to 10% after 2018. Clients should be advised as to the wide array of expenses that qualify as “medical expenses” for purposes of the medical expense deduction in case they would like to benefit from any elective health-care related purchases before 2018 ends.

In addition to expenses such as unreimbursed health insurance premiums, medical procedures and Medicare premiums, costs for items such as bandages, dental and vision care and certain travel and meal expenses may be included. Dental insurance and long-term care insurance premiums are also deductible, as are prescription drug costs.

See Robert Bloink & William H. Byrnes, Year-End Tax Checkup: Maximizing Post-Reform Medical Deductions, Think Advisor, November 18, 2018.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.