The income tax, property tax, mortgage interest, and donations are dollar-for-dollar deductions.īut to calculate the medical deduction we first must multiply the taxpayer’s AGI of $60,000 by 7.5% (0.075) to calculate a threshold of $4,500. The taxpayer also has $6,000 in medical expenses $2,000 in state income taxes $3,000 in property taxes $5,000 in mortgage interest and $2,000 in charitable donations to deduct. Medical Expense Deduction ExampleĬonsider a single filer with an adjusted gross income of $60,000 for the 2019 tax year. (2) Once that hurdle is cleared, the taxpayer’s total itemized deductions must exceed his or her standard deduction amount for his or her filing status. Only the excess counts toward the deduction. (1) The amount of qualified medical expenses must exceed 7.5% of the taxpayer’s adjusted gross income for tax year 2019 and 10% of the taxpayer’s adjusted gross income for 2020. The formula for deducting medical expenses has a few twists and turns.īefore benefiting from these expenses, there are two hurdles to clear:
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How to Calculate the Medical Expense Deduction They are the first item that appears on Schedule A, right ahead of taxes and interest deductions. Medical expenses are claimed on Form 1040, Schedule A. Where to Claim the Medical Expense Deduction The taxpayer can deduct qualified medical expenses paid during the tax year for himself and his dependents. The IRS allows taxpayers to deduct qualified medical expenses if the taxpayer itemizes and meets specific thresholds.
Medical Expense Deduction Overview What Is the Medical Expense Deduction? Other Tax Benefits for Medical Expenses.Maximizing the Medical Expense Deduction.
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