Thursday, January 8, 2015

MEDICAL AND DENTAL EXPENSES (2015 TAX ADVICE) (ADVANCE TAX RELIEF LLC www.advancetaxrelief.net (800)790-8574)

Taxpayers who itemize may be able to deduct medical and dental expenses for themselves, their spouse, and their dependents.
Eligible expenses include both health insurance premiums and out of pocket expenses not covered or reimbursed by insurance.
Unfortunately, there is significant limitation on the deduction, which make it useless for many taxpayers:
1) You can only deduct medical and dental expenses that's above 7.5% of your adjusted gross income (AGI). Your AGI is your total taxable income, minus deduction for retirement contributions and one-half of your self employment taxes (if any), plus a few other items (as shown at the bottom of your Form 1040) So, unless your medical expenses are substantial or your income is low, the 7.5% limitation will eat up most or all of the deduction.


**THE MORE MONEY YOU MAKE, THE LESS YOU CAN DEDUCT**

EXAMPLE:
AL is an employee whose AGI for 2008 is $100,000. He pays $7,600 out of his own pocket for health insurance and uninsured medical expenses for the year for himself and his wife. For AL to deduct any medical expenses, they'd need to exceed 7.5% of his AGI, which is $7,500(7.5% x $100,000 = $7,500). Because he paid a total of $7,600 in medical expenses for the year, he can deduct only 100. The other $7,500 in medical expenses cannot be deducted.
Many people assume they'll never be able to deduct their medical expenses, so they don't bother to keep track of them.
But what if you end up being wrong?
Let our experienced professionals prepare your current and past due tax returns in 2015.
Call us now (800)790-8574 for details.

ADVANCE TAX RELIEF LLC
www.advancetaxrelief.net

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