Paul’s Wasted Hour
I was organizing my parents’ tax documents the other day while I was up visiting them for a week. I asked my dad to rummage through his “duck box” (a box with ducks on it that he uses to store all paper he has ever received… ever) to find their medical expenses for the year. He eventually handed me a bunch of bitty prescription receipts, dental bills, random drug store purchase receipts, and some medical insurance statements. I began to enter all of the amounts into a spreadsheet to calculate the total and enter the amount into their tax return. An hour later, I came up with a total of just over $300 which I knew was not even close to enough to claim. That hour was not particularly well spent.
Luckily, I am weird and enjoy calculating things in spreadsheets; however, let’s assume you don’t share my strange hobbies and let’s try and save you some time this tax season.
Medical Expense Threshold
Medical expense claims are subject to a dollar amount threshold that must be met before any tax savings can occur. Before you rummage through your equivalent to my dad’s duck box, take the following quick steps to see whether your medical expenses for the year will exceed the threshold.
Calculate
Take your approximate income and multiply it by 3%. If you have a spouse, use the lower income and multiply that by 3%. If the calculated amount is lower than $2,635, then the calculated amount is the threshold. If it’s higher, then you’ll use $2,268.
Estimate
Consider your medical expenses for the year (for both spouses and any dependents if applicable) and estimate the total amount paid. If you were reimbursed any amounts, reduce the total by the amount reimbursed.
Compare
Compare the calculated threshold with your estimated medical expenses. If your medical expenses paid are nowhere near the threshold, then you probably won’t be able to claim them. If the amounts are fairly close, then it’s a good idea to dig through the paperwork and find the receipts in case they can be claimed.
Job done - either way it’s time saved or medical claimed.
P.s. if you have your own version of a “duck box”, let me know in the comments. I would love to tell my dad he’s not alone in this.
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