Just a reminder that at the beginning of the tax year you need to track your spending on health related issues. This is important if you purchase hearing devices as this Tax offset is one of the few ways of getting some money back on your hearing aids.
If you are out of pocket for medical expenses for you and your dependants in the 2015 financial year, you may be entitled to claim a tax offset. (Of course please always check with your accountant for advice for your particular circumstances) To determine the out of pocket amount you must deduct any amounts reimbursed to you from the total of the eligible expenses.
The Net Medical Expenses Tax Offset is subject to income testing. Taxpayers with an adjusted taxable income above $90,000 for singles or $180,000 for a couple or family in 2014-15 will be affected. The family threshold will increase by $1,500 for each dependent child after the first. These taxpayers can claim a reimbursement of 10% for eligible out of pocket expenses incurred in excess of $5,233 (indexed annually).
Taxpayers with an adjusted taxable income below these thresholds will continue to be able to claim a reimbursement of 20% for net medical expenses over $2,218 (indexed annually) when they lodge their tax return.
The Net Medical Expenses Tax Offset will be phased out from 1 July 2019.
The offset is to be phased out by way of two sets of transitional arrangements. For these purposes the existing medical expenses that may be claimed have been placed into one of two categories:
Category A: From the 2014-15 income year until the end of the 2018-2019 income year: Taxpayers can only claim the Net Medical Expenses Tax Offset for medical expenses that both meet:
Category B: For the 2014-15 income year:
Taxpayers will be eligible to claim the full range of medical expenses (as defined currently) but only if they have received an amount of the Net Medical Expenses Tax Offset in both the 2012-2013 and 2013-2014 income years. There is no claim in this category for 2015-2016 and beyond.
What records do you need to keep?
All information is provided in the interests of Hearing Health education and is of a general nature. In all cases you should consult your doctor or other allied health professional for advice regarding your individual circumstances.