If you are a taxpayer who itemizes your deductions, you probably know that medical expenses are deductible but only if they exceed a certain threshold. For years, that threshold has been 7.5 percent of adjusted gross income (AGI). However, starting next year, medical expenses must exceed 10 percent of your AGI before they can be deducted.
Since the threshold will be higher, it might make sense to try to "bunch" your medical and dental expenses in 2012 so that a higher amount will be deductible. Deductible medical expenses include a wide variety of things including the premiums paid for long term care policies. Other deductible expenses include, but are not limited to, the following:
Payments to doctors, dentists, surgeons,psychiatrists, and nontraditional medical practitioners
Payments for in patient hospital and nursing home care
Payments for acupuncture treatments
Inpatient treatment programs for drug and alcohol addiction
Payments for drugs that require a prescription (over the counter medications are generally not deductible)
Payments for false teeth, prescription eyeglasses, hearing aids, crutches and wheelchairs
For a more thorough list of deductible expenses, visit the IRS website and review Publication 502.