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JRsMaMa
LIF Adult
Member since 11/07 2044 total posts
Name:
Jake's Mama
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Can someone explain accounting for medical expenses on your taxes?
2012 (March on) was the 1st year I had to pay for DS health coverage. Will I be able to submit my cancelled checks for a "credit" on my taxes? I'm not sure of the exact terminaology but any insight will be greatly appreciated. Thanks!
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Posted 1/21/13 11:15 AM  |
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Rosie0613
LIF Adolescent
Member since 8/10 875 total posts
Name:
Rosie
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Re: Can someone explain accounting for medical expenses on your taxes?
Yes, but you only get a deduction for every dollar that is above 7.5% of your adjusted gross income. So if your adjusted gross income is $1,000 and you paid $100 for medical expenses, you only get a deduction for $25.
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| Posted 1/21/13 11:17 AM |
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JRsMaMa
LIF Adult
Member since 11/07 2044 total posts
Name:
Jake's Mama
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Re: Can someone explain accounting for medical expenses on your taxes?
Posted by Rosie0613
Yes, but you only get a deduction for every dollar that is above 7.5% of your adjusted gross income. So if your adjusted gross income is $1,000 and you paid $100 for medical expenses, you only get a deduction for $25.
Thank you. Ok so say my deduction was $3000 for example, what does that mean? I'm sure I will not get $3000 back from uncle sam. LOL
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| Posted 1/21/13 11:24 AM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19457 total posts
Name:
L
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Re: Can someone explain accounting for medical expenses on your taxes?
My understanding is that the federal deduction is only for non-reimbursed out of pocket medical expenses that exceed 7.5% of your income. So for example, lets say your income for the year is 50,000 and you paid 3000 in total for all medical expenses (for your entire family) for the year which were not reimbursed, none of it would be coming back to you as 7.5% of 50,000 is 3750. Had you spent more than 3750, every dollar over that amount would be listed on your taxes as a potential deduction. Now in NJ there is also a state deduction for medical expenses - I think it is anything over 2.5% so in NJ it is easier to meet the threshold.
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| Posted 1/21/13 11:48 AM |
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MrsPJB2007
MBA at your service!
Member since 7/06 12020 total posts
Name:
MJ
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Re: Can someone explain accounting for medical expenses on your taxes?
Posted by JRsMaMa
Thank you. Ok so say my deduction was $3000 for example, what does that mean? I'm sure I will not get $3000 back from uncle sam. LOL
You have to look at what your adjusted gross income is in order to determine if you will be able to deduct anything on your taxes.
Example:
AGI is $75,000
7.5% of $75,000 is $5,625
You had $10,000 in qualified medical expenses that you paid out of pocket for the year.
The first $5,625 is NOT deductible because you have to reach 7.5% of your AGI.
The remaining $4,375 WOULD be deductible on your Schedule A.
*This all applies ONLY if you itemize your deductions.
Hope this helps.
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| Posted 1/21/13 11:49 AM |
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JRsMaMa
LIF Adult
Member since 11/07 2044 total posts
Name:
Jake's Mama
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Re: Can someone explain accounting for medical expenses on your taxes?
Posted by MrsPJB2007
Posted by JRsMaMa
Thank you. Ok so say my deduction was $3000 for example, what does that mean? I'm sure I will not get $3000 back from uncle sam. LOL
You have to look at what your adjusted gross income is in order to determine if you will be able to deduct anything on your taxes.
Example:
AGI is $75,000
7.5% of $75,000 is $5,625
You had $10,000 in qualified medical expenses that you paid out of pocket for the year.
The first $5,625 is NOT deductible because you have to reach 7.5% of your AGI.
The remaining $4,375 WOULD be deductible on your Schedule A.
*This all applies ONLY if you itemize your deductions.
Hope this helps.
Thank you to everyone who answered!
Referencing your answer. I NORMALLY do not itemize because it never made sense for me. But now that I have about $3000 of eligible decuctions using the math you provided above, will it make sense? Will I get more back? I guess I should probably wait until I file my taxes but I'm itching to find out approx how much I can expect back this year. 
Message edited 1/21/2013 11:58:41 AM.
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| Posted 1/21/13 11:58 AM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19457 total posts
Name:
L
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Re: Can someone explain accounting for medical expenses on your taxes?
Deciding whether to itemize is a personal decision, but in general if you own a home and have a family I think it is more beneficial to itemize. Of course you should do your taxes all the different ways to determine what is right for you (standard deduction, itemizing, and checking to see if you fall into the AMT). I personally like to go to an accountant so he/she can assist me with my taxes to make sure they are done correctly.
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| Posted 1/21/13 12:04 PM |
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TheWhiteRabbit
Thru the rabbit hole!
Member since 7/06 4412 total posts
Name:
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Re: Can someone explain accounting for medical expenses on your taxes?
If your filing status is single, the government gives you a standard deduction of $5,950. If you have more than $5,950 in deductions, then it makes sense to itemize. It’s not a dollar for dollar addition to your refund though. CREDITS add dollar for dollar to your refund, DEDUCTIONS do not. I’ll give you a not entirely accurate but easy to understand example: Just say your income is $50,000 and you have no deductions (ignore for a second the gov’t giving you a deduction) and your tax rate is 10% so your tax would be $5,000. If you had $10,000 in deductions then your tax would be $4,000 ($50,000 income less $10,000 deductions x the 10% rate) so $10,000 in deductions saves you $1,000 in taxes based on a 10% tax rate.
You should consult with your accountant to see if you should itemize or not, as they would know what you can take as a deduction.
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| Posted 1/21/13 1:17 PM |
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Lillykat
going along for the ride...
Member since 5/05 16253 total posts
Name:
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Re: Can someone explain accounting for medical expenses on your taxes?
Are you asking about deducting you child's medical premiums or expenses from actual doctor visits.
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| Posted 1/21/13 2:40 PM |
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