{"id":13539,"date":"2018-10-03T08:00:40","date_gmt":"2018-10-03T13:00:40","guid":{"rendered":"http:\/\/taxprocenter.proconnect.intuit.com\/?p=13539"},"modified":"2018-10-10T14:21:46","modified_gmt":"2018-10-10T19:21:46","slug":"last-crack-at-lower-medical-expense-deduction-floor","status":"publish","type":"post","link":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/last-crack-at-lower-medical-expense-deduction-floor\/","title":{"rendered":"Last Crack at Lower Medical Expense Deduction Floor"},"content":{"rendered":"

Medical expense deductions have been an up and down\u00a0proposition in recent years. Under longstanding tax law\u00a0rules, out-of-pocket medical expenses were deductible to\u00a0the extent that they exceeded 7.5 percent of a taxpayer\u2019s adjusted\u00a0gross income (AGI). Starting in 2012, a tax law change\u00a0raised the deduction floor to 10 percent of AGI for most taxpayers,\u00a0although the 7.5 percent floor continued to apply through 2016 if\u00a0either the taxpayer or the taxpayer\u2019s spouse had reached age\u00a065 before the end of the tax year. The deduction floor was\u00a0scheduled to be 10 percent of AGI for all taxpayers for 2017 and\u00a0later years.<\/p>\n

Tax Law Reform<\/strong>
\nThe Tax Cuts and Jobs Act<\/a> of 2017 reduces the deduction\u00a0floor to 7.5 percent of AGI for 2017 and 2018 only. After 2018,\u00a0the deduction floor will reset to 10 percent for all taxpayers.\u00a0Consequently, 2018 is the last year that your clients can take\u00a0advantage of the lower deduction floor.<\/p>\n

Year-End Strategy<\/strong>
\nClients whose medical expenses for 2018 are at or near the\u00a07.5-percent-of-AGI mark may be able to nail down a deduction by\u00a0accelerating planned medical procedures or purchases into\u00a02018. What\u2019s more, clients whose expenses to date already\u00a0exceed the 7.5 percent deduction floor may want to shift medical\u00a0expenses into 2018, especially if it’s unclear whether expenses\u00a0for 2019 will exceed the 10-percent-of-AGI floor.<\/p>\n

Shifting strategies may include scheduling upcoming medical\u00a0or dental checkups, buying new eyeglasses or stocking up\u00a0on contact lenses, and paying off unpaid medical bills before\u00a0year end. Even if cash is tight, an expense paid by check or\u00a0credit card this year counts toward the 2018 deduction, even\u00a0if the check is not cashed or the credit card bill does not arrive until 2019.<\/p>\n

Caution: Accelerating medical expenses or payments only\u00a0makes sense if a client will itemize deductions for 2018 \u2014 and\u00a0that may not be the case, even for clients who have routinely\u00a0itemized in the past. The increased standard deduction\u00a0amounts, coupled with new limitations on deductions for state\u00a0and local taxes and mortgage interest, may cause allowable\u00a0itemized deductions to drop below the standard deduction\u00a0for some clients.<\/p>\n

Overlooked Medical Expenses<\/strong>
\nClients who would benefit from a medical expense\u00a0deduction for 2018 should also be sure they claim all of the\u00a0deductible expenses they are entitled to for the year. Here\u2019s\u00a0a checklist of some commonly overlooked medical expense\u00a0deductions:<\/p>\n