5 Steps to Maximizing Medical Expense Tax Deduction: New Guide from Zane Benefits
Tax filers are able to deduct the amount of medical expenses in excess of 7.5% of Adjusted Gross Income (AGI). To quickly calculate the minimum amount of medical expenses that you need to have incurred in order to qualify for the deduction, take your AGI and multiply it by 0.075.
Example: If your AGI was
(2) Whose Medical Expenses May be Deducted?
Medical expenses may be deducted for yourself, spouse, dependent, qualifying child, qualifying relative, and/or decedent. Medical expenses are deductible as long as the person was considered a spouse or dependent at the time services were performed or when payment was rendered.
(3) Medical Expenses That Qualify for Deduction:
(4) Overlooked Expenses That Qualify for Medical Expense Deduction:
• Travel expenses to and from medical treatments (see
• Insurance payments from already-taxed income (includes long-term care insurance)
• Uninsured medical treatments (e.g. false teeth, contact lenses, etc.)
(5) Health Reimbursement Arrangements (HRAs), Health Savings Accounts (HSAs), and Flexible Spending Accounts (FSAs) as Vehicles for Medical Expense Tax Deductions
A Health Reimbursement Arrangement (HRA) is an employer-funded plan that reimburses employees tax-free for HRA-qualified medical expenses. HRA reimbursement dollars received by an employee are not included as income and therefore do not affect their AGI.
A Health Savings Account, or HSA, is a financial account established by an individual to pay for qualified medical expenses tax-free. HSAs must be linked with a qualified high-deductible health insurance plan and anyone can contribute to it.
A Flexible Spending Account (FSA) is a tax-advantaged account that allows an employee to pay for future qualified medical expenses through payroll deduction.
Click here for a comparison chart of HSAs, HRAs, PRAs & FSAs.
• - - About
Read the full story at http://www.prweb.com/releases/2012/5/prweb9531001.htm
|Copyright:||(c) 2012 PRWEB.COM Newswire|