The first and perhaps most important change is that medical and dental expenses must exceed 10 percent of AGI before they can be claimed as a deduction. However this is an exception which states that taxpayers over 65 years of age may continue to use the previous threshold of 7.5 percent. Furthermore these expenses can only be claimed if itemized and cannot be claimed if the taxpayer has already claimed the standard deduction. The IRS also mandates that claimed expenses must have been paid in 2013 and must have been paid for the taxpayer, their spouse or their dependents. Only certain expenses are eligible and for guidance IRS Publication 502
should be consulted.
Finally while travel expenses incurred while traveling to receive medical care are eligible double deductions are not.Finally, perhaps the most obvious regulation relates to claiming medical and dental expenses paid from tax free accounts, this is referred to as double benefit. Such accounts include Health Savings Accounts or Flexible Spending Arrangements, any expenses paid from these accounts are not eligible for deductions. In summary it is essential that tax professionals
make their clients aware of the new guidelines to ensure they receive the maximum refund with minimum stress.
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