If you paid for medical or dental expenses in 2013, you may be able to get a tax deduction for costs not covered by insurance.
Here are some facts about claiming the medical and dental expense deduction.
1. You must itemize. You can only claim medical and dental expenses for costs not covered by insurance if you itemize deductions on your tax return using Schedule A of Form 1040. You cannot claim medical and dental expenses if you take the standard deduction.
2. Deduction is limited. You can deduct medical and dental expenses that are more than 10% of your adjusted gross income if your under age 65. If your adjusted gross income before itemized deductions and exemptions is $50,000, you can only deduct unreimbursed medical expenses that exceed $5,000. For those 65 and up, the income limit is 7.5%
3. Expenses paid in 2013. You can include medical and dental costs that you paid in 2013, even if you received the services in a previous year. Keep good records to show the amount that you paid.
4. Qualifying expenses. You may include most medical or dental costs that you paid for yourself, your spouse and your dependents. Some exceptions and special rules apply. Visit IRS.gov for more details.
5. Costs to include. You can normally claim the costs of diagnosing, treating, easing or preventing disease. The costs of prescription drugs and insulin qualify. The cost of medical, dental and some long-term care insurance also qualify.
6. Travel is included. You may be able to claim the cost of travel to obtain medical care. That includes the cost of public transportation or an ambulance as well as tolls and parking fees. If you use your car for medical travel, you can deduct the actual costs, including gas and oil. Instead of deducting the actual costs, you can deduct the standard mileage rate for medical travel, which is 23 cents per mile for 2013.
7. No double benefit. Funds from Health Savings Accounts or Flexible Spending Arrangements used to pay for medical or dental costs are usually tax-free. Therefore, you cannot deduct expenses paid with funds from those plans.
Jéneen R. Perkins is a freelance accountant and consultant serving entrepreneurs, families and small businesses. She prides herself in being fluent in English instead of “Accountant-ese”.
I frequently get updates via email about the latest news headlines, etc. I received one that caught my eye for two reasons: it was about money and marriage. Being that money is usually the number reason why married couples fight and get divorced, I never thought the two mixed very well. And honestly, I feel that what’s mine is mine! But the article gives a brief summary about why one should go through the suggested checklist. But I am going to provide a clear do-it-yourself debt credit cleanup (if necessary) for you and your future spouse.
Don’t just take out the trash; take out your credit reports/scores too.
Every year, you and your future spouse are allowed to get 3 free credit reports. You are allowed one from each bureau: Transunion, Experian, and Equifax. I strongly suggest checking all three, as errors can be listed on all reports, some, or just one. By combing through the reports, both of you can literally see what you two are up against financially. Once, you checked the reports, I would suggest checking your scores as well. Typically, you can get access to your score from each of the bureaus for a fee. But sometimes you can get access to your score for free if you sign up for a monthly membership and cancel it after the trial period. Note: I recommend that you use the 3 sites above only. There are a lot of “knock-off” credit score websites out there.
Talk the talk, and walk the walk
Now that all of your financial skeletons are out to the closet: talk about it. Create two set of goals: one for short-term goals to be met in 1 month up to 1 year, and anything else should be considered long-term. Also, be sure to include something rewarding, like a vacation or some luxury item that is affordable. Make a budget based on all sources of regular income, and compare it with your goals for a reality check. If you are having trouble making a budget give me a call or try a “budget theory” like this one. Something will probably have to be put aside if it is not a high priority. For instance, purchasing a new 90 inch HD TV in 6 months can be a financial goal and a reward. But let’s not give it artificial priority when a high interest credit card could be paid off in the same time frame. One last thing, open a joint account for the wedding and establish a regular savings plan! If you are having trouble
Cross all the T’s and Dot all the I’s
Exchange and vows and become one. Then make all the necessary adjustments and updates regarding: health insurances (pick the best option), life insurance policies (again, pick the best), bank accounts, and credit card accounts. If you are sharing everything, then do it all the way! Also, this would be a great time create a will and, or a living will.
Shoot for the moon and the stars
Again, this is another planning step. But it’s planning for your life after marriage and in the future. Do you want a home? Are you going to travel frequently as a couple? Are you going to have children? Whose is going to retire first? There is a boat load of questions that need to be answered before and after marriage. As long as it is feasible and affordable, why not incorporate it in your plan? Even if it sounds ridiculous to you but is the dream of your spouse, look into it. Honestly, your financial plans should mirror your lives. As result, it will change as life changes.
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"Putting My Money Where My Mouth Is" is a journal about real life experiences and answers to tough tax questions posed to Jéneen R. Perkins, Owner of Eclat Enterprises, LLC