#3 Include All Healthcare Spending in One Year
For many taxpayers, healthcare costs can be a sizable tax deduction, but the IRS only permits you to write off expenses that exceed 7.5% of your AGI. If your AGI is $50,000 and you paid $5,000 in medical expenses, you can deduct $1,250 from your taxable income.Â
For this reason, it may be advantageous to combine all of your significant medical costs into a single year. These expenditures may include basic procedures, hospital visits, dental work, prescription medication, eyeglasses, hearing aids, and therapy for mental health issues, as well as transport charges to and from the providers.
Consider making all of your planned health-related expenditures by the end of December if your medical spending this year will be close to 7.5% of your AGI. You can optimize your medical deductions by getting your teeth straightened, purchasing new glasses, or scheduling an elective procedure by the end of 2022.Â
Likewise, if you’re not close to the 7.5% of AGI level for medical costs in 2022, wait until January to make any non-urgent purchases linked to your health because they might be better for your tax situation the following year.
