Salt Lake City, UT. – Seniors could get a break from a looming “health tax” hike set to kick in next year, if a new bipartisan bill making its way through the U.S. Senate clears Congress.
Laura Polacheck, communications director for AARP Utah, says the seniors advocacy group is working to educate members on the measure that would prevent an increase in the income threshold that seniors have to meet in order to deduct medical expenses.
Polacheck says if the bill is not passed, many seniors will see a big bump in their annual tax bills.
“AARP strongly opposes any plan that would essentially cut taxes for the wealthy while imposing more costs on people who are low-income, older and sick,” she states.
Polacheck explains that currently seniors can deduct medical expenses that rise above 7.5 percent of their income.
If the measure doesn’t pass, seniors could only deduct expenses that exceed 10 percent.
Polacheck says even though the vast majority of Americans ages 65 and older have Medicare coverage, the average beneficiary spends almost $6,000 a year in out-of-pocket costs, for prescription drugs and other expenses.
According to recent IRS data, nearly a third of older taxpayers who claimed the medical expense deduction earned less than $50,000 a year, with almost three in four earning less than $75,000.
Polacheck says the deduction helps millions of middle income older Americans keep more of their money to pay for other essentials.
“We think these people are among the most vulnerable in our country, and they deserve at least some form of protection from paying both very high health care costs and very high taxes,” she stresses.
Two U.S. senators from Ohio, Republican Rob Portman and Democrat Sherrod Brown, introduced the Seniors Tax Hike Prevention Act of 2017 (S. 1977) last week. A hearing in the Senate Finance Committee has not yet been scheduled.
– Article by Eric Galatas, Public News Service