The medical deduction was not only preserved, but the AGI floor was reduced from 10% to 7.5 percent for 2017 and 2018. (after which it returns to 10 percent ). The AGI floor is intended to eliminate deductions for small medical expenses by limiting them to those that exceed a certain percentage of your AGI.
Example: Your AGI for the year is $100,000 since you earned $100,000 in wages and had no other income, losses, or adjustments. The first $7,500 (7.5 percent of $100,000) of usually deductible medical expenses is not deductible in this situation for the year. Thus, if your medical expenses total $8,000, only $500 ($8,000 – $7,500) is deductible. Because of the 10% floor, none of your medical costs will be deductible in 2019 if your income and medical expenses are the same; 10% of a $100,000 AGI equals $10,000, which is more than the $8,000 in medical expenses.Of course, there's always the possibility that the decreased 7.5 percent floor will be extended beyond 2018, but don't bank on it.
This is when things become a bit tricky. Because medical deductions are itemised, you must have more than the new standard deduction, which is $24,000 for a married couple filing jointly (or $18,000 for a head of household with a dependent child), $18,000 for a head of household, and $12,000 for everyone else.
The medical deduction must be maintained for families of disabled individuals and senior adults who require special care. Without this deduction, those organisations could have faced exorbitant medical bills with no tax relief. This deduction, however, is not limited to disabled people, older persons, or their families. You never know what will happen with medical bills in the future.
Bunching Deductions - Bunching deductions is a good method for itemised deductions. That involves paying as much of your medical expenses in a single year as feasible, so that the total exceeds the AGI floor and your itemised deductions surpass the basic deduction.
For Example, your child requires orthodontic treatment that will cost $12,000 in total, and the dentist provides a payment plan. If you pay in instalments, the payments will be spread out over several years and you will not be able to exceed the medical AGI floor in any one year. However, if you pay in full, you will surpass the floor and be eligible for a medical deduction.
Understanding Medical Deductions - Knowing what is and is not deductible as a medical expense will also assist you in getting the most out of your medical deductions. Unreimbursed expenses including those from doctors, dentists, and hospitals, as well as medical insurance premiums, are all deductible. Here is a list of several medical expenses that are tax deductible that you may not be aware of:
Pre-adoption medical costs for adopted children | Chiropractors
Birth control pill prescriptions | Practitioners of Christian Science
Medical expenses incurred by the decedent | Diapers for adults
expense of drug addiction treatment | Aids for lactation
Expenses of egg donation | Dogs that serve as guides
Devices for the elderly | Enhancements to Fertility
Medical supplies and equipment | Nursing services in the home
cost of in vitro fertilisation | Meals from a hospital stay
Home modifications for people with disabilities | Expenses for medical conferences
Removing lead-based paint | Premiums for Medicare
Tuition costs for students with learning disabilities | Costs of non-hospital institutions
Legal fees relating to medical issues | Expenses for nursing homes
Programs to help you lose weight (limited) | Expenses for sterilisation
Programs to help people quit smoking | Costs of organ donation
Some of the above have particular requirements
You may even be allowed to deduct medical expenses that you pay for others in certain instances.
Dependents on medical care - This only applies if you had a dependent at the time the medical services were provided or the expenses were paid (an eligible child or other relative). An individual can be a dependent for medical purposes even if his or her gross income disqualifies him or her from doing so.