Why does my accountant have to know about my health?
Because of the new tax bill, many people won’t bother with tax write-offs any more. That’s because the new tax law doubled the standard write-off amount. Which means that you can deduct $12,000 from your income for tax purposes even if you didn’t have any write-offs at all.
But if you had write-offs of more than $12,000, then it could make good sense to itemize your write-offs. For some people, one of the biggest write-offs is medical expenses. If you have really high medical expenses during the year, then Medicare premiums can be a write-off. So can the nursing home bill. Assisted living expenses can also be written-off if you are “chronically ill” and “personal care services are provided according to a plan of care prescribed by a licensed health care provider.”
Even some legal fees can be considered a medical expense that you can write off. A mentally ill woman in Michigan thought she was just fine and refused to go to the hospital. Her husband had to hire a lawyer to get his wife committed to a psychiatric facility. The legal fees were a “medical expense” that he could write off.
The rules can be pretty complicated, but here’s the bottom line: tell your accountant or tax preparer about all your medical expenses. They might help lower your tax bill, which could be a great benefit if you are over seventy and a half and have to take required minimum distributions from your IRA or 401(k) retirement account.