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Explaining the Legalese of the US Supreme Court's Ruling on the Affordable Care Act ~ pj | 355 comments | Create New Account
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Explaining the Legalese of the US Supreme Court's Ruling on the Affordable Care Act ~ pj
Authored by: Anonymous on Sunday, July 01 2012 @ 04:30 AM EDT
The deduction for medical expenses was increased from 2% of adjusted gross income (AGI) to 7.5% in the 1980s. AGI includes not only W2 income but dividends, capital gains and any state tax refund from the prior year. IRA contributions and capital losses lower AGI.

An AGI of 100K with 10K in medical expenses would yield a $2.5K deduction. This would lower federal tax owed by about $650. In 2014 the deduction allowance will be increased to 10% of AGI.

Why Congress made it more difficult to deduct medical expenses when rising health care cost has been an issue since the 1970s is anyone guess. Obviously too great a loss in tax revenue at 2% of AGI, but to raise the it nearly nearly 400%?

[ Reply to This | Parent | # ]

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