The Effects of Tax Reform on the Medical Deduction

The Effects of Tax Reform on the Medical Deduction

Since its inception in 1942, the deduction for qualified medical expenses has offered a type of federally funded insurance to taxpayers who itemize. By allowing the deduction of out-of-pocket medical spending that exceeds a threshold, the deduction is similar to a high-deductible health plan, under which the federal government subsidizes subsequent spending at one’s marginal tax rate.