2009 Year End Tax Tips- Medical Expenses

Medical Expenses

Typically, you may not qualify for medical deductions on your tax return.  Reason:   You’re entitled to a deduction only to the extent your unreimbursed medical and dental expenses for the year exceed 7.5% of your AGI.

Year-end strategy: If you are near the 7.5% mark—or already over it—schedule nonemergency medical and dental visits before year-end.  For instance, you might have an eye examination and end up ordering new glasses.  The additional expenses can help you qualify for a medical deduction in 2009 or increase your existing deduction.  You may be closer to qualifying for a medical expense deduction than you think.  If you’re like most employees, you must contribute an ever-escalating amount to the company health insurance and/or dental plan.  When you add in the other expenses, co-payments and deductibles, you might qualify for a deduction in 2009, especially if your family has incurred other sizeable expenses this year.

Tip:  Conversely, if you definitely will not exceed the 7.5% mark for 2009, you may as well postpone nonemergency expenses to 2010.  The basic idea is to bunch together medical and dental expenses in the year they will benefit you the most.

Tags: Financial Services, Health insurance, Itemized deduction, Tax