2013 Itemized Medical Deduction Limit Increase

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A little heralded change is now in effect that could impact your deductible health care expenses when you file your 2013 taxes in 2014. It relates to the itemized medical deduction limit for claiming medical expenses not covered by your health insurance. The limit at which you can claim these expenses was increased from 7.5 percent to 10 percent of 2013 adjusted gross income (AGI).

Prior to 2013, you could claim an itemized deduction for medical expenses paid for you, your spouse and your dependents, to the extent those expenses exceeded 7.5 percent of your AGI. But thanks to the health care laws – known as Obamacare – an even higher threshold of 10 percent of AGI now applies to most taxpayers. There is a temporary three year exemption to the higher limit if either you or your spouse will be 65 or older as of December 31, 2013. The higher 10 percent AGI threshold will not affect these groups until Dec. 31, 2016. But beginning Jan. 1, 2017, all taxpayers will only be able to deduct the amount of the total non-reimbursed allowable medical care expenses that exceeds 10% of their annual AGI.

Those who claim the standard 2013 deduction also won’t be impacted by this since you need to itemize to claim the medical expenses deduction. This change will impact your 2013 tax return, filed in 2014 if applicable.

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[…] Higher income limit to claim medical deductions. Prior to 2013, you could claim an itemized deduction for medical expenses paid for you, your spouse and your dependents, to the extent those expenses exceeded 7.5 percent of your AGI. But thanks to the health care laws an even higher threshold of 10 percent of AGI now applies to most taxpayers. There are some exemptions which are detailed in this article. […]

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