IRS Publication 502 Available for 2018 Tax Filing Season

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The IRS has released the latest version of Publication 502 for use in preparing 2018 tax returns.Taxpayers interested in filing itemized deductions for medical expenses will find the IRS Pub. 502 a useful resource when preparing their federal income tax returns. Some of the more notable changes include the following:

  • Updated to reflect the 2018 medical mileage rate of 18 cents per mile.

  • This new version reflects the change to 7.5% of adjusted gross income for all taxpayers, which is a result of tax reform enacted 12/22/17.

  • Note has been added under the “What Expenses Can You Include This Year?” section to clarify the difference between when you can deduct a medical expense on your tax return as an itemized deduction vs. when an expense is eligible for reimbursement under a Health Care FSA.

  • The section on “Breast Pumps and Supplies” has been revised to clarify that “the costs of excess bottles for food storage” are not a medical expense.

  • The section on “Fertility Enhancement” includes a reminder that listed procedures must be performed on the taxpayer or the taxpayer’s spouse or dependent to qualify as medical expense.

  • Form 1040A is no longer available and all taxpayers must use Form 1040 to itemize medical expenses for the 2018 tax year.

Publication 502 provides helpful details on what qualifies as a medical expense under Code § 213(d), which can help identify the expenses that may be reimbursed or paid by health Flexible Spending Accounts (FSA), Health Savings Accounts (HSA), or Health Reimbursement Arrangements (HRA). However, Publication 502 should be used with caution in connection with Flexible Spending Accounts (FSA), Health Reimbursement Arrangements (HRA) and Health Savings Account (HSA) benefits because the primary focus of this publication is to assist taxpayers with identifying medical expenses that are tax deductible on their federal income tax return, and it does not factor in differences in the specific rules for reimbursing expenses under health FSAs, HSAs, or HRAs.

Categories: Benefits in General, Compliance, Health Care in General | Tags: IRS Pub 502 , Publication 502 , Medical Expenses , Itemized Medical Expenses , 2018 Tax Filing | Return