Evelyn Jacks: Illness is Expensive; Tax Savings Can Help

One of the most common yet most missed provisions on the personal tax return is medical expenses, and in an aging demographic, they are more prevalent. 

This means there is a greater chance that professional counselling is required on this topic to ensure taxpayers claim all the expenses they are entitled to. 

The allowable list is lengthy. . .so is the list of ineligible expenses. The first rule for the best claim is to group medical expenses into the best 12 month period ending in the tax year; then make the claim on the return of the spouse with the lower taxable income. That’s because medical expenses are reduced by 3% of net income on line 236. Lower earners generally get a better claim.

So what’s deductible? The list of expenditures prescribed by qualified medical practitioners includes:

• Air conditioners
• Attendant care expenses
• Bathroom aids and incontinence products
• Cancer treatments and travel to receive them if not available in your home town
• The incremental costs of gluten free products
• Hearing aids and their batteries
• Insulin and its monitoring devices
• Whirlpool bath treatments

And what’s not deductible? Notably for the elderly:

• Personal response systems such as Lifeline and Health Line Services
• Athletic or fitness club fees
• Blood pressure monitors
• Cosmetic surgery
• Organic food and over-the-counter vitamins and supplements

In some cases, medical expense claims fall into a “gray area.”

It’s Your Money. Your Life. Now’s a good time to go over your tax return to see if you claimed everything to your advantage this past tax filing season. If not, contact a tax specialist to adjust your return.

NEXT WEEK: A surprising case on warm climate retreats.

Evelyn Jacks is president of Knowledge Bureau and author of 51 books on tax and personal wealth management. She is also the founder and director of the Distinguished Advisor Conference (DAC). The theme of the 2014 three day think tank in Horseshoe Bay, Texas Nov 9-12 will be “Think BIG: Find the Sweet Spots in Wealth Management”  Follow Evelyn on Twitter at @EvelynJacks.