Medical Expenses

Deductible medical expenses include health insurance premiums, fees for medical and dental services, prescription drugs expenses, and other related expensesh. However, only medical expenses that exceed 7.5% of your AGI are deductible.

You may maximize the deduction in spite of the limitation by "bunching" your discretionary medical expenses and procedures into one year, by participating in your company's cafeteria plan or health reimbursement arrangment (HSA), or by establishing a health savings account (HSA).

A portion of any qualified long-term care premiums you pay may also deductible. Refer to the chart below to determine how much of your long-term care premium you can deduct based on your current age.

Consider taking out long-term care insurance now. This will allow you to lock into a relatively low premium rate for the entire term of the policy.