TCJA is to be applies to taxable year 2018 to 2025

TCJA is to be applies to taxable year 2018 to 2025

Itemized Deduction (Schedule A)

Itemized deductions are expenses pay by the taxpayer during the taxable year. Include the following:

* Medical and dental expenses

* Taxes paid

* Interest paid

* Gifts to charity

* Applicable disaster, casualty and theft losses

* Other miscellaneous deductions

In general if the taxpayer’s itemized deductions are greater than the standard deduction, the taxpayer should choose to itemize

Today will be talking of the medical and dental expenses

1. Medical and Dental Expense

a. Medical expenses must be o alleviate or prevent a physical or mental defect or illness. Expenses that are merely beneficial to general health are not allowed. Expenses paid or reimbursed by the taxpayer’s insurance company, employer or any third party are not allowed

Taxpayer can deduct medical and dental expenses par for the taxpayer, his spouse and dependents

b. Medical and dental expenses include the following

i. Medical Insurance premium, but not premium paid with a pre-tax dollars under a cafeteria plan

ii. Doctor and dentist bills

iii. Cost of a nursing home or other long-term facility, if the medical care is the primary reason for the person being there

iv. Qualified long- Term care services

v. Hospital bills and lab works

vi. Prescription medications

vii. Medical aids (glasses, contacts , hearing aids and wheelchairs

viii. Medical travel and transportation

c. Insurance premium

Taxpayers can deduct insurance premiums they pay for the policies that cover medical care. Medical policies can payment for treatment that includes;

i. Hospitalization, surgical services and X ray

ii. Prescription drugs and insulin

iii. Dental care

iv. Replacement of lost or damage contact lenses

v. Long term care (subject to certain limit)

d. Medicare

Taxpayer not covered under social security can voluntarily enroll in a Medicare A. In this this situation the premium is a qualified medical expense. Premium paid for Medicare B and D also qualify as a deductible medical expense.

e. Long-Term Care Insurance

A long-term care insurance contract is an insurance that provide only coverage of qualified long-term care services

Qualified LTC premiums are deductible up to the following amount for 2018

AGE Limit

40 or under $420

41 to 50 $780

51 to 60 $1560

61 to 70 $4,160

71 or over $5,200

The limit on premium is per person, not per return.

f. Lodging and transportation

A taxpayer who incurs in lodging expenses to obtain medical care while away from home can deduct up to $50 per night for each person, if they meet the following;

* The lodging is primarily for, and essential to, medical care

* A doctor in a licensed hospital or in a medical care facility provides the medical care

* The lodging is not lavish or extravagant under the circumstances

* There is no significant element of personal pleasure, recreation or vacation in the travel away from home

Transportation for, and essential to, medical care is deductible. Taxpayer can either deduct actual transportation expenses or use a standard millage rate. The standard millage rate for medical expenses purposes is $0.18 per mile for 2018

g. Deductible amount

Taxpayers can deduct only medical expenses for which they received no insurance or other reimbursement

The taxpayer can deduct on Schedule A only the amount of medical and dental expenses that is more than 7.5% of their AGI

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