CNBC: “3 lesser-known ways to trim your 2022 tax bill or boost your refund before year-end”
CNBC, November 25, 2022 — “After nearly a year of high inflation, rising interest rates, and stock market volatility, it’s easy to see why many Americans are cutting back on holiday gifts, says Kate Dore, CFP® in today’s article on CNBC. “While it may not feel like a top priority, experts say trimming your 2022 tax bill may boost your finances going into the New Year.”
As a result, she advises, “You’ll need to estimate your 2022 income, and possibly beyond, to know if these strategies make sense for you. When in doubt, it may pay off to run projections with a tax advisor.”
Kate turned to Marguerita Cheng, CFP® Pro, who suggested we prepare future medical expenses for a deduction.
“It’s not easy to claim the medical expense deduction,” Marguerita knows. “For 2022, there’s a tax break for unreimbursed medical expenses that exceed 7.5% of your adjusted gross income. But can only claim it if you itemize deductions. Typically, you’ll itemize if deductions — including charitable gifts, medical expenses and more — exceed the standard deduction, which is $12,950 for single filers or $25,900 for married couples filing together for 2022.
While it’s difficult to plan for medical expenses, you’re more likely to maximize the deduction by “bunching” expenses for two years into one, explains the CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland.
“For example, with multiple children in orthodontic braces, you may ask to prepay the remaining balance before year-end if you can afford it, she suggested. “The provider may also provide a discount for paying off everything sooner,” said Cheng, who’s also a member of CNBC’s Financial Advisor Council. Of course, you’ll need to project your adjusted gross income, total itemized deductions and tally your previous 2022 medical expenses first.”