Hello Fellow Taxpayers,
I want to thank all of those who expressed well wishes when Ali went for shoulder replacement surgery on Monday (posted on my personal Facebook page). All went well and the procedure took less than an hour; however, I did not get to see her for almost four hours. I took her home on Tuesday, and she is recovering. Lots of pain means lots of drugs and lots of ice which helps, but it will be a long haul. She cannot move her shoulder in any manner for a minimum of 6 weeks.
Ali is cranky, but hanging in there. Thankfully Medicare and her insurance will cover most, if not all of the costs.
Which brings me to the rest of us and our medical expenses: If you have medical expenses, you may not be able to deduct them for two reasons. One is that they have to exceed 7½% of your adjusted gross income and then only if you itemize.
Remember, your standard deduction has almost doubled from what it was under the old law. As such, you may not be able to deduct them. I have been recommending that clients (through their business or individually) open up a Health Savings Account or HSA. You can put in pre-tax dollars through your employer or make a contribution if you own the business. You also can make after-tax contributions, then take a deduction on your personal tax return. Unlike a Flexible Spending Account or FSA where you have to use it or lose it, you do not have to spend anything to get the deduction. And as long as the prescription or medicine is prescribed (and some pertains to over the counter drugs), it is a qualified expense. You can also reimburse yourself for your health insurance premiums (unless paid with pre-tax dollars via your employer).
The caveat is that you have to have a high deductible plan and the insurance program has to be HSA qualified. I changed my plan some years back and it has worked out great for our tax situation. If this is of interest to you, bring it up when you come in to see me for your tax preparation, and we can go over it.
Until next time,
Jeffrey “the medical deduction man” Schneider