Medical Expense Deduction | 7.5% vs 10%

reg medical expense deduction

Jeff writes in: “I was told by my REG CPA review course that 7.5% would be testable for the medical expense deduction. Can you please confirm this?” All right. So I'm going to present that is the medical exemption that they're referring to. And so right now it's Q3 2021. And they're saying that they believe that the medical expense

deduction should be 10%, not 7.5%. As I stated in the NINJA Materials. It's actually 10% for real life under the cares act. Cause in 2021 tax returns are prepared under the cares act. However, in CPA Exam land – It's a bit different. The AICPA tests on the Cares Act from September of 2020 through December 2020.

And we told all of the CPA review providers that as of January 1st, 2020, The Cares Act when no longer be testable. So that means everything that the cares act changed relative to TCJA then it's rolling back to TCJA. Corporate charitable contributions going from 25% back down to 10% as it was under TCJA net operating loss rules, you have the 80% threshold.

Individual medical expense deduction is back down to seven and a half percent. So make sure that your review course is using 7.5% and it's going to be 75% until July 1st, 2022, when the 2022 tax laws are. That's the wall on the exam, unless Congress does Cares Act number two, and it will certainly be a number two.

Have a question for the podcast? Ask Jeff.


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Jeff Elliott, CPA (KS)

Another71 | NINJA CPA Review

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