Using Medical Tax Deduction Benefits To Your Advantage

Not many tax payers are completely conscious of the different categories under which tax deduction is available for medical expenses. People who do have knowledge of these categories are more able to make good use of it to cover most of their medical bills. They also know that they can take away medical costs as long as it exceeds 7.5 percent of their adjusted gross income. All the others will be able to make use of this benefit by following the guidelines below:

1. The first requirement is to attain the 7.5 per cent figure. To achieve this, you should take into account the medical expenses for every person listed on your tax return: your spouse, your children and all other dependents. You can even take account of the medical and dental bills of a family member who might have died during the course of the past tax year.

2. Don’t forget to include the expenses such as transportation from your residence to the place where you will be treated. You can calculate your expenses by using the cents-per-mile allowance provided on the IRS website. Your expenses are not limited to that though, there are many more such as long term care insurance (based on your age), uninsured treatments such as an extra pair of eyeglasses or pair of contact lenses, false teeth, hearing aids and prosthetic limbs, even some program’s for weight loss have been added to the expenses list.

3. Other tax deductible items are for people with special medical needs such as the use of crutches or wheelchairs for example. Also, if you alter your house — on doctor’s request of course – in order to add a ramp or widen the doors, these costs also can be deductible in part.

4. Other deductions: don’t disregard all the miscellaneous deductions. They include: expenses made on eye surgery, acupuncture, legal abortion, drug rehabilitation, prescription drugs and insulin, nursing home and nursing services, ambulance service, hospital expenses, laboratory expenses, health insurance premiums, dependent fees paid to doctors, surgeons, specialists, dentists, psychologists, and other medical practitioners. When you add all these up, any figure you find which is beyond the 7.5 per cent mark is deductible from tax.

The down side is that there certain medical costs cannot be deducted. For example: cosmetic surgery, dancing lessons gymnasium payments or costs for a weight loss program, hair transplants and electrolysis operations, bottled water-still or sparkling, diaper service, teeth whitening and maternity clothes.

 


Elliott Dawson is a contributing editor at DebtFinanceArticles.com. This article may be reproduced provided that its complete content, links and author byline are kept intact and unchanged. No additional links permitted. Hyperlinks and/or URLs must remain both human clickable and search engine spiderable.

 

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The Joys Of Child Care Tax Deduction

The policy on child care tax deduction gives you more reasons to maintain your family’s progress. With the joys of a new birth, there are also many tax savings that you may be entitled to. Here are some of the benefits:

(a) Dependency Exemption, which is a supplementary exemption.
(b) Credit on Child Tax.
(c) Credit on Child and Dependent Care.
(d) Tax deduction, through transferring revenue to your child.

(a) Dependency Exemption is a type of personal exemption which will reduce your tax bill by subtracting your gross income’s necessary amount which will be directly proportional to the annual inflation. To benefit from this exemption, you should meet the following criteria:

• The child or dependent must be living in your home the whole year or must be a relative.
• The gross income of your dependent should not exceed the amount of the annual exemption. Note that this benefit doesn’t apply to children under the age of 19 years or full-time students under the age of 24 years.

• You (the taxpayer) should be supporting at least half of your child’s total cost of living.

• The dependent must be a US, Mexico or Canada resident.

If the dependent conforms to all the above rules, then all that is needed for this exemption is the child’s social security number.

(b) Credits on Tax: Together with the personal dependency exemption, there are also certain tax credits that you can apply for after child birth. For example, you can receive Child Tax Credit and Child and Dependent Care Credit. Credits on Tax are a real advantage because they actually reduce the total amount of tax you will pay. If your child is adopted, the foster parents can seek tax credits on their income tax for expenditure on legal adoption.

(c) Income shifting: Since children are included within a lower tax bracket, it will also be possible to save on tax money through transferring your funds from your account to your children’s. Nevertheless, you should take care when doing this. It is not allowed, for example to putting an adult’s investment in a child’s name.

 


Elliott Dawson is a contributing editor at DebtFinanceArticles.com. This article may be reproduced provided that its complete content, links and author byline are kept intact and unchanged. No additional links permitted. Hyperlinks and/or URLs must remain both human clickable and search engine spiderable.