Your Tax Question - 080

Dear John,  When we were talking the other day about some of the things that are changing with the tax code, you had mentioned something about the Medical Expenses going away.  When does this happen?  Thanks, Hank
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Hi Hank,


No, the medical deduction is not going away, it is just being increased from 7.5% of your AGI to 10% of your AGI.  This is a deduction which is taken on your Schedule A deductions if your qualifying medical expenses presently exceed 7.5% of your Adjusted Gross Income but beginning in 2012 this deduction will not be allowed until your AGI reaches 10%.  In other words you have to spend more on medical expenses to be allowed this deduction.  So it is only going away for those who usually spend a little more than 7.5% to a little less than 10% of their AGI.  


Hope this clarifies things for you.


Thanks,
John


PS.  One of the things that is new this year for 2011 is the allowed medical expenses for breast pumps and lactation expenses.  It's about time in my opinion since sexual reassignment surgery has been allowed for years.

Your Tax Question - 079

Dear John, How much do I have to earn before I have to file a tax return.  I am a single college student who works at a restaurant, and I live with my parents.  Thanks, Jim T.
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Hi Jim,


Basically if you earn more than $3,650 you are required to file a tax return.  There are nuances in the code (there is always nuances in the code) but that is the general income requirement.  You can refer to IRS Publication 501 to help you further or you may email me and I can help - it's kinda what I do.  http://www.irs.gov/publications/p501/ar02.html#en_US_2010_publink1000220708


Thank you,
John

Your Tax Question - 078

Dear John, I was wondering if there is an age limit for claiming my child on my taxes.  Thank you, Jennifer
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Hi Jennifer,


Yes, Your child must be under age 19 (or under age 24 if a full-time student).  However, you may still be able to claim your child as a dependent relative as long as he/she meets some other IRS criteria as well.


Thanks,
John


PS.  Shoot me an email and I will be happy to help you with the Dependent Exemption tests.