Tax time. It’s just around the corner. Yay.
But there’s a bright spot in figuring taxes for most of us: deductions. Those subtractions that pare down the adjusted gross income (AGI) that is the primary benchmark that determines your tax rate, and ultimately your tax. There are a number of kinds of deductions. One kind is a deduction for extensive medical or dental expenses that was first introduced in 1942. People could deduct the portion of their “extraordinary” medical or dental expenses that exceeded 5% of their AGI (subject to a cap).
As of last year, the floor is now double that for people under 65. You’ll need to shell out fully 10% of your AGI in medical and dental expenses before you can deduct a dime of them. (In 2017, everyone, young and old, will be subject to this floor.)
Here are a few ways to increase the chances that you’ll hit that magic 10% figure:
- Indoor parkour. The kitchen area is best, after covering the floor with a thin layer of soapy water.
- Drive fast and take lots of chances. And/Or, follow the white lights on the road at night, rather than the red ones.
- Walk into a biker bar wearing Google Glass and just start recording, man.
- Fix those loose roof shingles before that thunderstorm gets too much worse.
(You know I’m kidding, right? Of course you do.)
People respond to cures a whole lot more than they respond to prevention. This is why the diet supplement industry is huge, and why gyms try so hard to lock you into a three-year contract. That, and the road from health to unhealthiness is so much easier than going the other direction. Only about 5% of people are able to lose 10% of excess weight and keep it off. (I’ve asked people who’ve repeated this figure, and none know where it came from.)
But, the best way to save on medical expenses is not to incur them. Being fat costs money. A lot of money. And now, any more catastrophic illnesses, caused by fatness or otherwise, are less deductible than they were just 15 months ago. It’s like adding insult to … injury.
If you take this federal tax deduction, especially now, you probably wish that you weren’t in a position to take it. So, try not to put yourself in that position!