With all the chatter about the fiscal cliff, you may not have heard of a tax change that will take effect on January 1 — and why going to the dentist now may be the right response to it.
If you’re under 65, on January 1 your medical tax deduction rate (including expenses for dental work) will take a big jump from 7.5% of gross income to 10%. (No change for folks 65 and older.)
If you’re like me, your health insurance pays a minimal amount for routine dental work — with most of the dentist’s bill being paid out of your own pocket. And if, God forbid, you should need additional work (filling cavities, etc.), you end up paying for most of that too.
A couple of cleaning visits plus a little extra corrective work can add up to a tidy sum that, when added to other medical expenses, may reach the 7.5% goalpost.
While this handy IRS bulletin spells out the bad news about the changes in medical deductions, it doesn’t explain why the goalpost was moved up to 10%.
The “why” involves paying for Obamacare. This extra tax burden on the middle class is just one of those teensy-weensy things Nancy Pelosi referred to when she said, “We have to pass the bill so you can find out what’s in it.”
So if you’re under 65 and have been putting off having dental work done, wait no longer — and do NOT accept an appointment in January.
If you’re a dentist, I suggest that you inform your clients about the tax change. (I’ve noticed optometrists have been encouraging their clients to spend down their health savings accounts in December.) While you’re at it, keep your offices open during the evenings and weekends to accommodate those last-minute clients.
No need to see the dentist? Then ask yourself if you’ve delayed having a physical or other annual medical evaluation. It’s time to hustle up and do your bit to not pay for Obamacare!
Still need convincing? Consider this: which is more painful, a quick trip to the dentist or writing an unnecessarily large check to Obama’s taxman?
Joanne Butler is a senior economics fellow at The Caesar Rodney Institute of Delaware. You can email her at joanne-butler@comcast.net.
