New Tax Bill Will Temporarily Lower the Threshold for Medical Expense Deductions
by David GoldfarbThe new tax bill that President Donald Trump signed into law in December 2017 contains many controversial provisions. American taxpayers must carefully examine them to determine how these changes will affect them. One important provision has received little media attention but has the potential to help Americans with high medical bills. The attorneys at Goldfarb Abrandt Salzman & Kutzin can help you plan for both medical bills and taxes to maximize deductions and engage in strategic financial planning.
Changes to Medical Cost Deductions in the New Tax Plan
Currently, American taxpayers can deduct qualifying medical expenses that exceed 10 percent of their adjusted gross income. CNBC reports that this threshold will temporarily reduce to 7.5 percent for tax years 2017 and 2018. After that, the threshold will revert to 10 percent. For those taxpayers with high medical expenses, this provision has the potential to significantly reduce overall tax liability.
This particular deduction has a history of constant changes in recent years. Before the passage of the Affordable Care Act (ACA) in 2010, all taxpayers were entitled to the 7.5 percent threshold. The ACA restricted the 7.5 percent threshold to only those taxpayers ages 65 or older. Younger taxpayers were restricted to ten percent. But this exclusion was scheduled to expire in 2016, meaning that younger taxpayers are effectively given an additional two years in which to deduct medical expenses between 7.5 and ten percent of their adjusted gross incomes.
To Itemize or Not
The medical deduction is only available to those who itemize their deductions. Because the new tax bill has significantly increased the standard deduction (both for single and married taxpayers who file jointly), fewer taxpayers will probably itemize their deductions. The lowered threshold may not, therefore, help many taxpayers.
Consult with a tax attorney, accountant, or other tax professional about your particular financial situation. An experienced tax professional can help you determine the best method of reducing your overall tax liability.
Of course, tax liability should not form the only consideration in accessing appropriate medical care. If you are concerned about paying for medical bills, a healthcare attorney can help you access the solutions that are right for you. You may qualify for Medicare, Medicaid, or disability benefits. You may also challenge claims that a public or private health insurance carrier denied. In any event, costs—while a real concern—should not prevent you from accessing the medical care you need.
Protect Your Medical Deductions With the Counsel of a New York Health Care Attorney
Improve your deductions and reduce your overall tax liability by consulting with a New York healthcare attorney. An experienced attorney can help determine your eligibility for Medicare, Medicaid, or benefits under your private health insurance plan. Experienced attorneys can also help identify all medical expenses and deductions for which a taxpayer may qualify. The highly skilled attorneys at Goldfarb Abrandt Salzman & Kutzin have decades of experience in ensuring that benefits are made available to those who deserve them and that taxpayers access all deductions to which they are entitled. Call (212) 387-8400 or write to us today to schedule your consultation.
