The Internal Revenue Service is used to letting Americans deduct necessary expenses from their income taxes, and that now includes personal protective equipment, including face masks, gloves, and even hand sanitizer. If you spent a pretty penny or two trying to keep you and your loved ones safe during the pandemic, now’s the time to deduct them from your taxes.
The bad news is that millions of Americans have already filed.
Better Late Than Never
The IRS made a late-breaking announcement last week that all PPE can be deducted from last year’s taxes. The government says these items qualify as “medical care” as long as the PPE was used to prevent the spread of the coronavirus under § 213(d) of the Internal Revenue Code. If your total medical expenses exceed 7.5% of your adjusted gross income, you can deduct anything you spent on PPE for yourself, your spouse, and dependents that isn’t already covered by insurance.
For example, if you made $50,000 in 2020, you could deduct medical expenses that cost more than $3,750 from your tax bill as long as they weren’t covered by insurance.
According to the law, because this money was used for medical purposes, the amounts are also eligible for reimbursement under health flexible spending arrangements (health FSAs), Archer medical savings accounts (Archer MSAs), health reimbursement arrangements (HRAs), or health savings accounts (HSAs). However, if an amount is paid or reimbursed under a health FSA, Archer MSA, HRA, HSA or any other health plan, it is not deductible under § 213.
If you’ve already filed your taxes for 2020, you can amend your return on the IRS website.
A Much-Needed Break
The change is expected to give a lift to millions of households through tax season, especially for individuals that haven’t had the luxury of working from home.
The cost of PPE went through the roof during the first few months of the pandemic. Studies show facilities looking to protect their workers from the virus experienced an 1,064% increase in PPE costs last April.
A recent report shows the cost of N95 masks went from $0.38 to $5.75 each (1,513% increase), the cost of vinyl exam gloves went from $0.02 to $0.06 each (300% increase), and the cost of isolation gowns went from $0.25 to $5.00 each (2000% increase) during the height of the pandemic.
Tough Times for the IRS
The Washington Post recently reported on how the IRS is struggling to keep up with demand for its services. Reports show that the agency has yet to go through filings from 2019. As of late last 2020, 7.1 million individual and 2.3 million business returns remained unprocessed, the report said.
Some stimulus payments still haven’t gone out the door, and new tax filing policies for those on unemployment are creating new hurdles for tax workers and auditors. With all these changes and mishaps, the report shows that 75% of calls to the IRS’s toll-free customer service line went unanswered last year, leaving people without the resources they need to file.
These delays and service shortfalls are expected to continue throughout the 2021 filing season and beyond. In response to the allegations, Agency spokeswoman Jodie Reynolds said in a statement that the IRS “remains committed to continue to do as much as it can, subject to budget constraints, to provide meaningful services to all taxpayers, whether in-person, on the phone or online.”
Filing your taxes this year may not be easy, but hopefully the latest policy will help you save more in the months to come or help you get the biggest refund possible.
When we discuss students, we always mention their qualities. Those qualities show what they are…
If you or someone you know is juggling mental health issues alongside substance abuse, understanding…
For the last couple of weeks, the Israel-Hamas conflict has taken over the news cycle.…
Our eyes are invaluable, serving as our windows to the world. The ability to see…
Undoubtedly, one of the most demanding and challenging professions is nursing. Nurses work long hours in…
Echocardiography, or echo for short, is a key diagnostic test used by cardiologists to assess…