Bunching medical expenses

I had a doctor's appointment today. Nothing wrong; just a routine checkup and blood tests, which I'm sure will tell me that, no, I'm not anemic. I'm just looking for any excuse to sit around in a lounge chair in my newly refurbished backyard.

And as I was driving to the doctor's office, I serendipitously learned a couple of medical tidbits via public radio programming.

First, today is Root Canal Appreciation Day. I've never had one, but from what I've heard, there's not much to appreciate about the procedure. As suspected, this "holiday" was created by a dentist.

The other medical item is that on May 14, 1796, Edward Jenner administered the first safe vaccine, a shot to fight the once-deadly smallpox infection. The successful inoculation also was the first time anyone had successfully prevented the infection
of any contagious disease.

What made Jenner's vaccine so remarkable, according to The Writer's Almanac, was that it was accomplished before the causes of disease were even understood, decades before anyone even knew about the existence of germs.

Before Jenner's breakthrough 212 years ago, smallpox killed about one in four adults who caught it, and one in every three children. It was so contagious, most people who lived in populous areas caught it at some point in their lives.

Initially, the public and Jenner's medical colleagues were skeptical of his discovery, so in 1798 he published at his own expense a book detailing his ideas about vaccines. The media outreach worked, and by 1840, the British government passed a law providing all infants with free smallpox vaccinations. It was the first free medical service in the history of that country.

Tax breaks for medical costs: Today in the U.S. the debate rages on about what role the federal government should play in medical treatments. Until it's resolved, most of us will continue to pay, some of us with a little bit of help from insurance, for our doctor and dental visits.

And if we end up incurring enough of them, we also might get some added help from the IRS via an itemized deduction for medical expenses.

This is a good idea in theory, but in practice it's one that most of us can't use.

The reason? We have to have to pay for ourselves enough medical costs to amount to more than 7.5 percent of our adjusted gross income. For someone making $30,000, that means doctor's bills in excess of $2,250. And even then, only the amount over $2,250 is deductible.

Because of that threshold, a lot of folks' out-of-pocket medical costs aren't of any tax use.

Tax planning tip: But you might be able to keep from wasting, from a tax perspective, that medical money if you set up a bunching strategy now. This basically is deciding how and when to make tax-deductible expenditures.

Since you have to spend the medical money by Dec. 31 of the tax year in which you'll claim it, the longer you have to consider medical treatments, the better your chances of reaching the deductible amount.

By looking at your expected income this tax year and the medical expenses you might face, you might be able to schedule a few more treatments so that you get the deduction on your 2008 Schedule A.

Have you been wanting Lasik? If you have or expect to have this year a good amount of other medical expenses, getting the eye surgery now might just put you over the deduction top.

What about your child's teeth? I'm not talking root canal here, but rather standard orthodontia. If you (or Junior) have been putting it off, consider adding this cost to your medical expense mix.

Of course, there are lots of other things to think about besides costs and taxes when making health care decisions. But by adding the tax component to the process, and earlier rather than later in the year, you might come up with a good medical and tax-saving prescription.

IRS Publication 502 elaborates on the expenses that you can consider in totaling up your deductible medical costs. And this story has more details on maximizing those medical deductions.