October 5, 2015
Should You “Bunch” Medical Expenses into 2015?
Posted by Armanino Tax Team
Medical expenses that aren’t reimbursable by insurance or paid through a tax-advantaged account (such as a Health Savings Account or Flexible Spending Account) may be deductible—but generally only to the extent that they exceed 10% of your adjusted gross income.
Taxpayers age 65 and older can enjoy a 7.5% floor through 2016. The floor for alternative minimum tax purposes, however, is 10% for all taxpayers.
By “bunching” non-urgent medical procedures and other controllable expenses into alternating years, you may increase your ability to exceed the applicable floor. Controllable expenses might include prescription drugs, eyeglasses and contact lenses, hearing aids, dental work, and elective surgery.
If it’s looking like you’re close to exceeding the floor in 2015, consider accelerating controllable expenses into this year. But if you’re far from exceeding it, to the extent possible (without harming your or your family’s health), you might want to put off medical expenses until next year, in case you have enough expenses in 2016 to exceed the floor.
For more information on how to bunch deductions or exactly what expenses are deductible, please contact us.
The tax decisions you make today can affect all aspects of your professional and personal life. We make it a priority to understand what you have in mind for your company, your family and yourself. Armed with this information, we carefully coordinate your tax, retirement, estate and financial planning needs to help you achieve your specific goals.