19 Mar Confusion about medical tax deduction

Q. The instructions on Form 1040 allow a deduction for medical costs that exceed .075 of adjusted gross income (AGI). However on the Schedule A form, you are instructed to enter 10 percent of adjusted gross income. Can I cross out the 10 percent and replace it with .075? I am a senior citizen and do my own tax return.
— Senior

A. It looks like you’re looking at the wrong form, or at least not the 2017 Schedule A.

For many years through 2012, taxpayers could deduct medical expenses in excess of 7.5 percent of their adjusted gross income.

For the years 2013 through 2016, the Affordable Care Act increased the AGI threshold to 10 percent with an exception for a taxpayer over age 65, who could use the 7.5 percent threshold, said Neil Becourtney, a certified public accountant and tax partner with CohnReznick in Eatontown.

For joint filers, only one spouse needed to be over 65, he said.

But 2017 and future years bring a change.

All taxpayers were going to be subject to the 10 percent AGI threshold regardless of age, but the Tax Cuts and Jobs Act included a provision rolling back the threshold to 7.5 percent for all taxpayers for 2017 and 2018, Becourtney said.

“As an aside, New Jersey, which allows few deductions under its gross income tax, does allow taxpayers to deduct medical expenses in excess of 2 percent of their New Jersey gross income, which can be lower than federal AGI,” Becourtney said, because it doesn’t include taxable Social Security benefits.

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