If you’re like many Americans, doing your taxes is a confusing chore. Deductions are crucial elements to filing taxes, especially if you’re expecting a return. However, few people know about all their options, especially their health deductions. And as we move into 2022, the new Affordable Care Act will cause even more changes to health deduction section of your tax forms, but not as much as you might think right away.
“Most major changes brought by the Affordable Care Act will come in 2022,” advised Jean Chatzky, finance expert and journalist whose Jean Chatzky’s Money School debuts this April. However, there are a few things that Chatzky advises taxpayers watch for this year:
- The contribution limit for Flexible Spending Accounts has been revised downward, to $2,500 beginning in 2022. There was no limit before, though most employers capped it at $5,000.
- Medicare payroll taxes may increase for some taxpayers. Those who earn over $200,000 as an individual or $250,000 as a couple will pay 2.35% to medicare. Those who earn less will continue paying the current rate of 1.45%.
Where taxpayers can see the biggest advantage will be in their medical-related deductions.
“Many taxpayers assume they can’t reach the 7.5% threshold to deduct medical expenses, but you might be surprised if you add it all up and include everything the IRS allows,” advised Chatzky. She provided a lot of insight on the common oversights we make that can and probably will push you to the 7.5% threshold. (more…)
Tax day is here, and if you are one of many who haven’t yet completed your forms, stress can attack your bowels with unwelcome enthusiasm. Whether you suffer from constipation, diarrhea, bloating, or cramps, having irritable bowels is not fun, especially as the most stressful deadline of the year draws near.
The following suggestions won’t help you with your taxes, but they will help you relax during this tough time of year so your digestive system doesn’t go haywire due to stress and anxiety.
Winston Churchill said, “If you’re going through hell, keep going.” The time to procrastinate is over. Sit down, be diligent, and get the job done. You will start to feel better after each box and line you fill out, so get to it. However tedious and painful doing taxes feels, keep going. The confidence you will earn knowing that you are getting it done will relax your agitated digestive system. (more…)
Tax season is upon us, and the deadline to file is this Sunday. Yikes! How does it always sneak up?
In addition to reminding you to get your finances in line, we also want to point out some of the commonly-overlooked health-related items you can write off on your taxes. Andrew Schrage of Money Crashers Personal Finance shares his expert insight on the topic.
In some select instances, health insurance premiums can be written off on your taxes. However, there are many exclusions, so you need to check the IRS website for a full list. But in the meantime, here is a list of things concerning your health you can safely write off on your taxes this year, as well as a few tips to ensure the process goes as smoothly as possible. (more…)
We are in the middle of tax season and many people are searching for every possible deduction to save some cash. Typically, gym membership fees are not tax deductible, but the possibility is there for those that may have had exercise prescribed by their doctor for a particular health issue.
Keep in mind that the IRS will not allow you to use your gym membership as a deduction if you are using it for overall health or weight loss. The membership fees may be deductible only if your doctor prescribes exercise at a gym to treat a medical condition or illness. Some of the conditions that might cause your doctor to prescribe using a gym are things like obesity, hypertension or certain mental illnesses.
As with any type of tax deduction, you want to make sure you are educated on the rules involved to avoid penalties or being audited. The three criteria for having a tax deductible gym membership include having a diagnosis from a medical doctor for a specific medical condition with written documentation, using the gym facilities to treat the diagnosed condition following your doctors instructions and you can’t have had your membership at the gym prior to being diagnosed with your medical condition. These criteria don’t seem so hard to meet considering more and more people are being diagnosed as obese and doctors are spending more time prescribing exercise to patients.
Advocates for taxing unhealthy food as a way of fighting the obesity epidemic may want to reconsider their views, at least in regards to taxing soda.
According to a new Northwestern University study, the main problem lies in the fact that obese people tend to drink diet soda anyway.
“After doing the analysis, it really turns out to be the case that obese people like diet soda so much more than regular soda that you can do whatever you want to the price,” said Ketan Patel, a fourth-year doctoral student in economics at Northwestern. “You’re not going to get that much change in obese people’s weight because they already drink diet soda.”
Patel was initially concerned that maybe people with bad eating habits are not deterred by slight price increases. However, this concern became moot once considering the diet soda factor. (more…)
In public health policy, you can’t get much more divisive or controversial than the topic of taxes on high calorie foods. It doesn’t help put out the fire when researchers say that the tax actually works.
Researchers used nearly 200 college students in an experiment to see how their food purchases would change, if at all, when there is a substantial tax on high-calorie foods.
“The most important finding of our study is that a tax of 25 percent or more on (high-calorie) foods makes nearly everyone buy fewer calories,” says lead researcher Janneke Giesen of Maastricht University in the Netherlands.
The only exception was people who were already calorie-conscious in the first place – their decisions were not swayed either way with the food tax.
I am sure you have heard the argument before that quitting smoking can help you save money. It is one reason used to argue for a tax on cigarettes. Recently, there have even been discussions of a tax on soda and possibly other unhealthy foods. Often our wallets are more important in motivating us than our own health.
Recently, I was able to visit Africa and help deliver supplies to orphanages that did not have electricity, beds, or even windows. They were enthusiastic, but a suitcase of children’s clothes just did not seem like enough. One orphanage told us that they are trying to raise money and just $2500 would build an entirely new building to house 30+ orphans. How could I not think about how much money I spend on frivolous things when there are children sleeping on concrete and not getting enough to eat? (more…)
The clever acronym PHIT stands for The Personal Health Investment Today Act of 2022. The PHIT Act was introduced in the U.S. House of Representatives last spring, and is intended to amend the IRS code to allow fitness-related tax deductions for up to $1,000 for individuals, or $2,000 for married couples filing jointly or heads of household.
But, only certain sports and fitness expenses qualify. The PHIT Act defines qualified activities as amounts paid for fitness center memberships, physical exercise programs, and exercise equipment.
Here are some of the expenses that are covered: (more…)