In the heart of tax time, everyone's looking for ways to cut their taxes. Yet even though medical deductions are available to reduce your tax bill, relatively few taxpayers take advantage of them. Why?
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, explains why the medical expense deduction is so hard to claim. First, Dan notes that you have to itemize in order to get any benefit from the deduction, as those taking the standard deduction get no extra benefit. Moreover, Dan goes on to point out that you're only allowed to deduct amounts above 10% of your gross income. That's a huge hurdle for most working families, and Dan reminds viewers that amounts that UnitedHealth Group (NYSE:UNH), WellPoint (NYSE:ANTM), and other health-insurance companies reimburse you on medical expenses isn't eligible for the deduction. Dan concludes that retirees are the most likely to take the deduction, yet their income is usually so low that the deduction does them little good in producing tax savings.
Get deductions you can use
People want deductions now more than ever, because tax increases that took effect at the beginning of 2013 affected nearly every American taxpayer. But with the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill. In our brand-new special report "How You Can Fight Back Against Higher Taxes," The Motley Fool's tax experts run through what to watch out for in doing your tax planning this year. With its concrete advice on how to cut taxes for decades to come, you won't want to miss out. Click here to get your copy today -- it's absolutely free.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group and WellPoint and owns shares of WellPoint. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.