Take full advantage of medical deduction while you still can

Take full advantage of medical deduction while you still can

The cost of medical and dental care is typically the largest expense for older Americans. Fortunately, some of these bills may be tax-deductible.

The 2016 tax year could be the last time adults age 65 and older can take advantage of a lower threshold for deducting a portion of your medical and dental expenses.

If you itemize your deductions on Schedule A of your tax return, among the categories to list are medical and dental expenses. However, they are subject to a limit.

For many years, the limit was 7.5 percent of a taxpayer’s adjusted gross income, meaning that only those medical expenses in excess of 7.5 percent of a taxpayer’s AGI were deductible. For example, if someone’s AGI was $40,000, only those medical and dental expenses that exceeded $3,000 (7.5 percent times $40,000 equal $3,000) would be deductible.

But the rules for deducting medical and dental expenses changed in 2013, increasing that threshold to 10 percent of AGI.

Seniors got a brief reprieve as Congress exempted people age 65 and older from the 10 percent threshold until 2017. 

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