![]() ![]() ![]() ![]() The bill doesn’t offset that cost and would therefore add to the deficit. Repeal would cost almost $33 billion over ten years. ![]() Repealing the increase in the medical expense deduction threshold would encourage efforts to scale back still other revenue provisions of health reform. Congress has already delayed the medical device tax, the health insurance tax, and the excise tax on high-cost health plans (the so-called “Cadillac tax”). Repeal would further undermine health reform’s revenue-raising provisions.Low-income seniors would reap little or no benefit, since most of their income comes from Social Security, which is largely untaxed. If lawmakers reduce the threshold for the medical expense deduction to 7.5 percent of AGI, taxpayers with incomes over $100,000 would receive almost two-thirds of the tax cuts, according to Congress’s Joint Committee on Taxation. Higher-income taxpayers receive the greatest benefit from income tax deductions because they face the highest marginal tax rates. Repeal would largely benefit high-income taxpayers.This would be a bad idea for several reasons: The House will vote this week on a bill to repeal the increase. For taxpayers age 65 and over, the higher threshold will take effect in 2017. Health reform increased the threshold from 7.5 percent of adjusted gross income (AGI) to 10 percent starting in 2013 for most taxpayers. Taxpayers may claim an itemized income tax deduction for extraordinary medical expenses that exceed a certain threshold. To determine the amount you can claim for vehicle expenses, multiply the number of kilometres by the cents/km rate from the chart below for the province or territory in which the travel begins.Repealing the increase in the threshold for deducting medical expenses, as a pending House bill would do, would give a costly, unnecessary tax break to high-income taxpayers. You must keep track of the number of kilometres driven during the tax year for your trips relating to moving expenses and northern residents deductions, or the 12-month period you choose for medical expenses. Your claim for vehicle expenses is the percentage of your total vehicle expenses that relate to the kilometres driven for moving or medical expenses, or for northern residents deductions.įor example, if you drove 10,000 km during the year, and half of that was related to your move, you can claim half of the total vehicle expenses on your tax return.Īlthough you do not need to keep detailed receipts for actual expenses if you choose to use the simplified method, we may still ask you to provide some documentation to support your claim. You must keep track of the number of kilometres you drove in that time period, as well as the number of kilometres you drove specifically for the purpose of moving or medical expenses, or for the northern residents deductions. ownership expenses such as depreciation, provincial tax, and finance charges.operating expenses such as fuel, oil, tires, licence fees, insurance, maintenance, and repairs.If you choose the detailed method to calculate vehicle expenses, you must keep all receipts and records for the vehicle expenses you incurred for moving expenses or for northern residents deductions during the tax year or during the 12-month period you choose for medical expenses. Although you do not need to keep detailed receipts for actual expenses if you choose to use this method, we may still ask you to provide some documentation to support your claim. If you choose the simplified method, you can claim in Canadian or US funds a flat rate of $17/meal, to a maximum of $51/day (sales tax included) per person, without receipts. If you choose the detailed method to calculate meal expenses, you must keep your receipts and claim the actual amount that you spent. ![]()
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