Medical Expenses - Medical expenses in excess 10% of AGI are deductible as itemized deductions (65 yrs and older still
remains at 7.5%)
Medical expenses are often the most overlooked expenses. Many taxpayers do not keep records of medical
expenses (including mileage) because they do not receive anything for it on their Federal return. While this may be true you
need to know that while the Federal may limit this item the State of Arizona does not. These expenses carryover to the State
at their full amount. Keep in mind that pre-tax medical insurance is not a deductible issue.
The IRS says no to
over the counter drugs with the exception of insulin. This is true even for drugs that a doctor instructs you to take.
If it is over the counter do not include in your drug costs. OTC drugs can no longer be put through your FSA if they
are not prescription.
Long Term Care Insurance is another item that is categorized under Medical Expenses. It
is deductible as follows: Age 40 & under $390.00; 41-50 $730.00; 51-60 $1,460.00; 61-70 $3,900.00and age 71 and over $4,870.00.
Per diem payments under a qualified long term care contract to a chronically ill individual up to $340.00 per day is tax-free.
Foreclosures -
are at an all time high. The IRS has created a new web page to provide information to individuals that have lost their homes
due to foreclosure. Help includes a worksheet to determine whether these individuals are exempt from reporting the cancellation
of debt that comes along with a foreclosure. Visit the IRS website at www.irs.gov
SCAMS - everyday there are scams
relating to the IRS. DON'T NOT FALL INTO THESE TRAPS. These scammers are out to steal your identity. Please
be aware that the IRS will never send you an e-mail requesting confidential information, nor will they phone you or show up at your
door. If they request your confidential information THEY ARE NOT THE IRS. Remember the IRS already knows all of your
stuff. Keep your identity safe - answer to no one. If they are the IRS they will do so by mail and they will never request
your confidential information. If you receive an e-mail DO NOT CLICK on any links in it, instead forward the e-mail to phising@irs.gov (see
instructions at www.irs.gov)
