January is the time of year when people receive all of their income information related to their taxes. It often gets people thinking about possible deductions they can take from their income to save money on their taxes. There have been some changes in healthcare around the country over the last several years, as many already know. However, if last year people suffered a personal injury with resounding medical expenses it could affect their taxes this year.
The IRS has released a fact sheet about how the changes to healthcare could affect taxes this year. This is especially relevant to those who were afflicted by serious injury and incurred corresponding medical expenses. Almost every step in the process of medical care can be considered an itemized deduction. This includes diagnosing, easing, preventing or treating a condition or injury. Potentially, this could be great news for someone who fell victim to personal injury last year.
People cannot claim expenses that were paid for by the insurance company. However, the majority of people who suffer an injury are left paying some portion of the medical costs associated with that injury. In that respect, people can deduct medical and dental expenses that are more than 7.5 percent of their adjusted gross income. Naturally, this number will vary with income earned.
While people may be considering filing a personal injury claim, they should not disregard the expenses that they have already incurred. People may or may not be able to recoup these expenses from a negligent party. It is important that all people affected by medical expenses last year be aware of the changes in medical expense tax deductions. It can only benefit those affected by medical costs.
Source: IRS, “7 Important Tax Facts About Medical and Dental Expenses,” Accessed Jan. 19, 2015