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Of those, just about 10 million taxpayers, or 7% of all taxpayers, claimed the medical expenses deduction.
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That might explain why, of those who itemized their deductions in 2009, neither of those income groups topped the list of those claiming the medical expenses deduction.
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The law raises the floor for the deduction of medical expenses, from 7.5 percent of income to 10 percent.
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Next, keep in mind that the medical expense deduction is limited to those qualifying medical expenses over 7.5% of your AGI.
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So for older folks with high medical expenses and relatively low incomes, the long-term care premium tax deduction is more likely to come into play than for middle-aged folks. (Another wrinkle: under ObamaCare, starting Jan. 1, 2013, the 7.5% floor goes up to 10% unless the taxpayer or his or her spouse is 65 or older).
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Although some of this planning is used for smaller estates, more standard planning (gifts within annual gift exclusion or for medical or tuition expenses, use of the lifetime exclusion of spouses, use of the marital deduction, etc.) is used to substantially reduce or eliminate tax liability.
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Eligible expenses are generally the same sort of out-of-pocket costs that qualify for the medical deduction but with some mind-bending differences.
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