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Lake Wylie Tax Service | Bookkeeping | Payroll Service

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Tag Archives: Medical

There is More to Deducting Health Insurance than Meets the Eye

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on October 20, 2020 by Lake Wylie Tax Services StaffOctober 20, 2020

Deducting Health Insurance and How to Maximize your Deduction
Health insurance premiums, especially in the wake of the Affordable Care Act, have risen dramatically and are one of the greatest expenses that most individuals pay. Although the cost of health insurance is allowed as part of an individual’s medical deductions when itemizing deductions, only the amount of total medical expenses that exceeds 7.5% of the taxpayer’s adjusted gross income (AGI) is deductible. The 7.5% limitation is increased to 10% for years after 2020.

The purpose of this article is twofold: first, to remind you what insurance can be included as a medical deduction; and second, to inform you of an alternate means of deducting health insurance for certain self-employed individuals—a means that avoids the AGI limitation and allows for deduction without itemizing.

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Posted in Tax Central | Tagged Medical, Medical Insurance

Congress Allowing Higher Medical Deductions for 2019 and 2020

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on January 9, 2020 by Lake Wylie Tax Services StaffJanuary 23, 2020

Healthcare | Higher Medical DeductionsMedical expenses are deductible as an itemized deduction but only to the extent they exceed a percentage of a taxpayer’s adjusted gross income (AGI). For a long time, the percentage was 7.5%, which was then raised for under-age-65 taxpayers to 10% for 2013 through 2016 and then lowered back to 7.5% for all taxpayers for years 2017 and 2018. It was scheduled to go back up to 10% starting with tax year 2019. However, with the passage of the Appropriations Act of 2020, Congress reduced that percentage back to 7.5% for tax years 2019 and 2020, allowing more taxpayers to qualify for the medical deduction.

However, keep in mind that the total of the itemized deductions must exceed the standard deduction before the itemized deductions will provide a tax break. So even if your medical deductions exceed the 7.5% floor, this doesn’t necessarily mean you will have a tax benefit from them.

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Posted in Tax Central | Tagged Medical, Tax Planning

Eldercare Can Be a Medical Deduction

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on May 8, 2019 by Lake Wylie Tax Services StaffJanuary 23, 2020

Senior Care can be a medical deductionBecause people are living longer now than ever before, many individuals are serving as care providers for loved ones (such as parents or spouses) who cannot live independently. Such individuals often have questions regarding the tax ramifications associated with the cost of such care. For these individuals, the cost of such care may be deductible as a medical expense.

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Posted in Elder Care & Planning | Tagged Medical, Tax Deduction

Relief from the Affordable Care Act Penalty for Not Being Insured

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on February 15, 2019 by Lake Wylie Tax Services StaffJanuary 23, 2020

Tax PenaltiesThanks to the tax reform, beginning in 2019, the penalty for not having adequate health insurance, which the government refers to as the “individual shared responsibility payment,” will no longer apply. 

The elimination of this penalty as of 2019 does not impact the health care subsidy for low-income families, which is known as the premium tax credit and which is available for policies acquired through a government insurance marketplace. This elimination also does not affect the penalties assessed on employers that do not offer affordable insurance to employees and that have 50 or more full-time-equivalent employees. 

However, the penalty still applies for individual taxpayers who did not have minimum essential health coverage for 2018 and is the greater of the sum of the family’s flat dollar amounts or 2.5% of the amount by which the household’s income exceeds the income-tax-filing threshold. 

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Posted in Health Care Reform, Tax Central | Tagged Insurance, Medical, Tax Reform

Disabled Taxpayer Tax Benefits

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on September 20, 2018 by Lake Wylie Tax Services StaffJanuary 23, 2020

disabled Taxpayer BenefitsTaxpayers with disabilities may qualify for a number of tax credits and other tax benefits. Parents of children with disabilities may also qualify. Listed below are several tax credits and other benefits that are available if you or someone else listed on your federal tax return is disabled.

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Posted in Deductions, Life Events, Tax Deductions | Tagged Medical, Tax Credit, Tax Planning
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