I know that most of our patients state that the end of the year is a big expense for Christmas presents. I certainly don’t want to add to that but here is something to consider:
Most who have a profit to show or have increases in their 401K type incomes will have to pay taxes in April. It isn’t the most fun discussion to have but it can be mitigated a little. When you have spent more than 7.5% of one’s Adjusted Gross Income on medical type expenses (including trips to the docs, reimbursed medical expenses, and out of pocket medical expenses), it can then be written off on taxes. Give you an example…You make $50,000 after deducting what you can for other tax deductions. That means if you spend more than $3750 in 2014 on medical expenses then that can be deducted. Hearing Aids and other out of pocket items that are medical expenses can be fully deducted from your income. One set of hearing aids can make or break that. It changes your taxes for the year to reduce paying Uncle Sam. This has been written into the tax code for many many years. Take advantage of it.
If funds are tight now, budget for that next year to spend to reduce your taxable income so that when you must spend for those items, they are deducted.