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Understanding the 2021 Medical Deduction

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• In 2021, the IRS allows all taxpayers to deduct their qualified unreimbursed medical care expenses that exceed 7.5% of their adjusted gross income.

• You must itemize your deductions on IRS Schedule A in order to deduct your medical expenses.

• The IRS allows you to deduct unreimbursed payments for preventative care, treatment, surgeries, dental and vision care, visits to psychologists and psychiatrists, prescription medications, appliances such as glasses, contacts, false teeth and hearing aids, and expenses that you pay to travel for qualified medical care.

• At this time, all unreimbursed medical expenses incurred as a result of COVID-19 are tax deductible.

• If you pay for your medical expenses using money from a flexible spending account or health savings account, those expenses aren't deductible because the money in those accounts is already tax-advantaged.

 

 

Medical expenses can take a bite out of your budget in any year. But especially during the pandemic, many taxpayers want to know: Are medical expenses tax deductible? Fortunately, if you have medical bills that aren't fully covered by your insurance, you may be able to take a deduction for those to reduce your tax bill. We'll take you through which medical expenses are tax deductible, if you qualify for this deduction and how to claim it.

 

Are medical expenses tax deductible?

The IRS allows you to deduct unreimbursed expenses for preventative care, treatment, surgeries, and dental and vision care as qualifying medical expenses. You can also deduct unreimbursed expenses for visits to psychologists and psychiatrists. Unreimbursed payments for prescription medications and appliances such as glasses, contacts, false teeth and hearing aids are also deductible.

The IRS also lets you deduct the expenses that you pay to travel for medical care, such as mileage on your car, bus fare and parking fees.

 

What is the deduction value for medical expenses?

The deduction value for medical expenses varies because the amount changes based on your income. In 2021, the IRS allows all taxpayers to deduct their total qualified unreimbursed medical care expenses that exceed 7.5% of their adjusted gross income if the taxpayer uses IRS Schedule A to itemize their deductions.

 

Your adjusted gross income (AGI) is your taxable income minus any adjustments to income, such as contributions to a traditional IRA and deductible student loan interest.

For example, if you have an AGI of $45,000 and $5,475 of medical expenses, you would multiply $45,000 by 0.075 (7.5%) to find that only expenses exceeding $3,375 can be included as an itemized deduction. This leaves you with a medical expense deduction of $2,100 ($5,475 minus $3,375).

 

Additionally, as a result of the Tax Cuts and Jobs Act (TCJA) of 2017, the standard deduction has nearly doubled from where it was in 2016. For 2021, the standard deduction is $12,550 for single taxpayers and $25,100 for married taxpayers filing jointly. The amount of the standard deduction usually determines whether or not you itemize your deductions or take the standard deduction. Unless your deductions are higher than the standard deduction, you usually won't itemize, which means you won't receive medical expense deductions.

TurboTax Tip: Normally, you should only claim the medical expenses deduction if your itemized deductions are greater than your standard deduction 

Are any pandemic-related medical expenses tax deductible?

The cost of any COVID-19 treatment is tax-deductible as an itemized deduction just like ordinary unreimbursed medical expenses. Health insurance companies, Medicare, or Medicaid should cover your treatment for COVID-19, but that might still leave patients with certain health insurance plans on the hook for deductibles or copayments. However, many private health insurance companies have agreed to cover all COVID-19 treatment costs, including any deductibles or copayments.

If you have any medical treatment expenses or related travel expenses for COVID-19 that haven't been reimbursed, those can be tax deductible if you itemize.

 

Which medical expenses are not tax deductible?

Any medical expenses you get reimbursed for, such as by your insurance or employer, can't be deducted. In addition, the IRS generally disallows expenses for cosmetic procedures. You typically can't deduct the cost of nonprescription drugs (except insulin) or other purchases for general health, such as toothpaste, health club dues, vitamins, diet food and nonprescription nicotine products. You also can't deduct medical expenses paid in a different year.

 

Additionally, if you pay for your medical expenses using money from a flexible spending account or health savings account, those expenses aren't deductible because the money in those accounts is already tax-advantaged.

 

Are any pandemic-related qualified medical expenses not tax deductible?

No. At this time, all unreimbursed medical expenses incurred as a result of COVID-19 are tax deductible.

How do I claim the medical expenses tax deduction?

To claim the medical expense deduction, you must itemize your deductions. Itemizing requires that you don't take the standard deduction. Normally, you should only claim the medical expenses deduction if your itemized deductions are greater than your standard deduction If you elect to itemize, you must use IRS Form 1040 to file your taxes and attach Schedule A.

 

On Schedule A, report the total medical expenses you paid during the year on line 1 and your adjusted gross income (from your Form 1040) on line 2.

 

Enter 7.5% of your adjusted gross income on line 3.

 

Enter the difference between your expenses and 7.5% of your adjusted gross income on line 4.

 

The resulting amount on line 4 will be added to any other itemized deductions and subtracted from your adjusted gross income to reduce your taxable income for the year. If this amount, plus any other itemized deductions you claim, is less than your standard deduction, you probably shouldn't itemize.

 

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Why Walking is the
Essential Exercise

by Julianna Strano

Walking. It’s a great activity with very powerful benefits for our physical health and our mental health.

 

A study completed by Science Daily laid out how walking benefits the brain. A summary of the study reports that “researchers found that the foot's impact during walking sends pressure waves through the arteries that significantly modify and can increase the supply of blood to the brain.”

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From both the mental health and physical health perspectives, going on regular walks can help your body burn fat, strengthen muscles and bones, increase energy and endurance, prevent disease, and improve mood, lower stress levels  and benefit mental wellbeing. Walking is an essential, yet oftentimes overlooked form of exercise. Light walks are simple and low intensity yet powerful and full of benefits.

 

The American Heart Association explains that walking is a simple way to help lower the risk of heart disease.

 

 “Walking is one of the simplest ways to get active and stay active. With each step you take, you travel further down the path to a healthier lifestyle. Research has shown that walking can have a significant impact on your health by lowering your chances of heart disease, and a regular walking routine can definitely improve the heart related indicators like cholesterol, lipids, and oxygen levels.

 

What Are the Recommended Goals

The CDC explains that the average American walks about 1.5 to 2 miles each day, and a good goal to set for ourselves is around 10,000 steps per day. Walking is free, easily accessible, available any time of the day and can be done outdoors in the fresh air or indoors on a treadmill. It’s a form of exercise that is available to us 24/7. The CDC recommends that we get 150 minutes of movement each week. This is the same as 30 minutes 5 days a week.  

 

Walking is easy to incorporate into our daily routine. For example, we can go for a short walk on a lunch break, go to the park for a short walk to get fresh air in the afternoon, take the stairs instead of the elevator, or walk to grab lunch rather than having it delivered to your front door. Walking can also be a social activity and a way to get exercise while talking with friends or colleagues.

 

Exercise doesn't always have to involve a gym membership, fitness classes, or high intensity workouts. Walking is a simple and beneficial way to get movement and exercise into your day, and it is important, so we are smart to make time for it.

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Julianna Strano is a senior at The University of Arizona majoring in journalism and sociology. Julianna is passionate about all topics related to health and wellness and has the goal of educating and informing others through her writing. Julianna joined the editorial staff of Today's Patient to have the opportunity to help educate others on patient rights and discuss topics that she is passionate about.

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The Importance of Being Honest with Your Doctor About Your Symptoms

by Faalik Zahra

Explaining what symptoms you are experiencing to a physician can be difficult. You may feel insecure in your knowledge of the symptoms, fearful of being vulnerable, or unaware of having specific symptoms. Regardless of the circumstance, the discomfort can be relieved by questioning your doctor and understanding why he or she is asking you for this information.

 

Let's Be Honest

Many patients are not honest when interacting with their doctors. According to a study published in JAMA 2019, 60%–80% of individuals surveyed expressed that “they had not been forthcoming with doctors about information that could be relevant to their health.”

 

This dishonesty or lack of communication about different symptoms and emotions can be detrimental to an individual’s health and the physician’s ability to provide proper treatment. Physicians understand the fear and hesitance that patients feel when interacting with physicians.

 

“I spend some time building a relationship with the family to build trust,” says Dr. Andrew Beck, an attending physician in the Division ofGeneral and Community Pediatrics as well as the Division of Hospital Medicine at Cincinnati Children’s Hospital. “I think having a relationship that allows for that bidirectional communication enhances the likelihood that we get to the right treatment plan for the patient at the right time.”

 

Be Comfortable In Sharing How You Are Feeling

A patient’s comfort is essential to physicians. It aids them in assisting the patient. Patients can also help themselves feel comfortable by asking their physician questions and being honest with how they feel. There may be times when a physician will explain why they are asking certain questions.

 

“The rationale should be explaining why we asked the question,” Dr. Beck shares. “It's not us being nosy or wanting to get it in people's business. It's trying to figure out what the problems are that we want to help manage, treat, and hopefully eliminate.”

 

Dr. Beck continues, “There are sensitive questions that we sometimes ask about habits, surroundings, living conditions, and others. We commonly call this the social history, the elements that influence the context in which they live. Some of these questions may seem far a field, but in many respects those are central to how we make diagnoses and suggest treatment plans. “

 

Physicians' questions are relevant to the physician’s diagnosis and treatment. They are using the patient's answers to provide a better diagnosis and hence treatment. “The reason we ask the questions is to ideally get the information that we need to help patients and their families,” Dr. Beck says.

 

Understanding the importance of being honest with your doctor will aid you in feeling more comfortable sharing your symptoms. Physicians want to help us. By being open with our symptoms and asking questions when we do not understand why the doctor is doing a procedure opens up a dialogue that is necessary for optimum patient care. 

 

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Faalik Zahra studies neuroscience and journalism at the University of Cincinnati and plans on becoming a physician. She has always had a strong inclination towards writing and sharing stories which have led her to pursue a journalism degree as well as founding an online media portal, Bearcat Voice. As a Senior Contributor, Faalik combines her passion for writing and her interest in medicine to explain medical issues to patients in a way they can clearly understand.

March 2022  page 4