During the last few months, the IRS has been busy. People in or near their retirement is where some of its work mainly focuses on.
Under the tax code, the health portion genetic-testing kits are considered as medical care, the IRS ruled. Typically, a person’s ethnic or geographic heritage is the summary of the part of a report from a genetic-testing kit. Lists of diseases or conditions the person might be genetically predisposed to be the other part of the report.
The buyers of the kits have an option in the IRS guidance to either use tax-qualified money to pay part of the purchase through holding in a health savings account or employer flexible spending accounts, or they can also choose to deduct a portion of the cost as a medical expense on Schedule A of Form 1040.
The maker of the 23andMe testing kit was where the ruling was issued. Under the new IRS rule, up to $117.74 of $199 cost of its health-and-ancestry kit qualifies as medical care, the company told The Wall Street Journal.
Part of the cost of smartwatches and smartphone health apps should also qualify as medical expenses under the tax doe, argued by some tax experts by following the guidance. Despite the fact that these devices monitor the various bodily condition, the IRS hasn’t ruled that way.
On the other hand, the definition of preventive care under high-deductible health plans (HDHP) has been expanded by the IRS.
If the taxpayer’s medical insurance qualifies as an HDHP, their contribution can be made to a health savings account by or on behalf of a taxpayer. Other than preventive care, the taxpayer has to pay for all medical expenses under HDHP until the annual deductible amount is spent.
The expansion of the definition of preventive care includes certain medical services and drugs for chronic illnesses. Even if how much of the annual deductible you paid, the medical insurance can cover all or part of these costs now from the first dollar.
Blood pressure monitors for hypertension, some serotonin reuptake inhibitors for depression, statins for heart disease or diabetes, some screening for diabetes, and other more expenses are some of the preventive care included under the new guidance. You can check further on the IRS web site at www.irs.gov and check IRS Notice 2019-45 for complete details.
The medical insurance may treat these costs as preventive care not subject to the deductible, the IRS said. The IRS also doesn’t claim that the insurance has to do that.
A new tax return designed specifically for seniors is going to be developed soon. Instead of the standard 1040, taxpayers ages 65 and older will have the option to complete 1040-SR instead.
A draft of the new form has been released by the IRS.
Compared to a regular 1040, the lines on the return and the schedules are the same. So that seniors won’t have a hard time, the new form uses a larger type and has other visual changes that should be easier for taxpayers 65 and older to read. And so that taxpayers don’t have to waste time and look for the amount in the form’s instruction, there will be a chart showing the standard deduction amount on the form itself.
An ability to choose which one between the new 1040-SR or the traditional 1040 will they use will be given to eligible taxpayers only. For you as a taxpayer to use the new form, you don’t have to comply with any requirements. In the 2019 tax year filing season, the new form is expected to be issued.
It is so common for the IRS to have so many changes every tax year. You as a taxpayer should be alert on knowing what’s new and be knowledgeable enough on what to do. There are a lot of ways to be up to date-- one is to check the IRS website at ww.irs.gov, or if would like to speak with someone professional in this field, you can then consider talking or consulting a tax professional to know on what are the best things you can do for yourself or for your family member who is eligible.
CONTINENTAL TAX AND ACCOUNTING SERVICES
