This was originally published on Monday, February 17, 2014, in the Pacific Daily News. Click here to subscribe to the PDN.
Last week’s Money Matters listed a few possible deductions or payments that you should consider when filing your taxes. Here are more to think about.
Medical or dental bills
Did you have medical issues that required frequent visits to the doctor or dentist? You may be able to deduct some of the expenses from your tax return. To do so, you will have to itemize your deductions. If you are claiming any medical expenses, you cannot file short form 1040A or 1040EZ. According to the Internal Revenue Service, take the following into consideration when filing a claim for any of your medical expenses:
• Add up your medical and dental expenses for yourself, spouse or dependents during 2013, you must use the date you paid the amount, not the date the medical service was received. Include co-payments and unreimbursed amounts for prescriptions, doctor visits and procedures. Some insurance premiums, medical supplies, medical-related mileage and transportation costs also may apply.
• If your total expenses are more than 7.5 percent of your adjusted gross income, you can deduct the portion of your expenses that exceed 7.5 percent. Example — if your income is $50,000, you can claim your medical expenses that are more than $3,750.
• You must have all your receipts for the services you are claiming.
To learn more about if you can claim your medical or dental expenses, visit the IRS website at www.irs.gov and download Publication 502.
If you are on Medicare, you may qualify for the new 2013 Medicare tax rate of 0.9 percent if you work and make a certain amount during the year. This will be in addition to the regular Medicare tax you are already paying. These are a few things the IRS lists to consider if this new tax applies to you:
• If you are a single taxpayer, the tax applies if you make over $200,000 a year;
• If you are married and filing jointly, and your combined income is more than $250,000; or
• If you are married and filing separately and your total income is over $125,000, you may have to make additional payments.
To report your Social Security taxes, use Form 8959. Some of these payments may be costly, so ask your employer to withhold more taxes on your paycheck or make estimated quarterly payments to the IRS. To find out more if you qualify, go to the IRS website. You may also use their Withholding Calculator.
Military or reservist
There are dozens of tax provisions for military members and their families. Here are just few from the IRS:
• Filing for tax returns: Extensions are available for military members who are on duty outside of the United States on the day of the tax return.
• Tax deductions:
• Active duty out-of-pocket moving expenses if the move was because of a permanent change of duty station (PCS); and
• Un-reimbursed uniform costs can qualify as a tax deduction if military regulations don’t allow you to wear your uniform off duty.
Publication 3, the Armed Forces Tax Guide, is available on the IRS website to review if you meet the requirements for these or other tax provisions.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at email@example.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.