2. Higher medical expense deduction threshold
Another way in which 2010’s Affordable Care Act had an impact on taxes was by raising the threshold for deductible medical and dental expenses from 7.5% to 10% of adjusted gross income, which made it harder to qualify for the deduction.
This meant that if you itemized your tax deductions, you could deduct eligible out-of-pocket medical expenses if they exceeded 10% of your income, rather than the previous 7.5%.
The Tax Cuts and Jobs Act gave taxpayers a brief reprieve from that change, lowering the threshold back down to 7.5%, but only for the 2017 and 2018 tax years. Starting this year, it returns to 10%.
In other words, as the IRS puts it in Publication 5307, which details how tax reform affects individuals:
“If you plan to itemize for tax year 2019, your unreimbursed medical and dental expenses will have to exceed 10% of your 2019 adjusted gross income in order to be deductible.”
