Medical Expenses - Medical expenses in excess 10% of AGI are deductible as itemized deductions
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 $420.00; 41-50 $780.00; 51-60
$1,560.00; 61-70 $4.160.00 and age 71 and over $5,200.00. Per diem payments under a qualified long term care contract to a chronically
ill individual up to $360 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)
