I have been asked to post the income tax rules for medical deductions attributable to our cancer.

That would be quite an undertaking this time of year and I'm not sure how much use it would be to our posters.

What I have decided to do is to offer to answer anyone's questions concerning that topic. This way I can see what interest may be out there. If I find a lot of interest I can always post something after this year's tax season. Brian has said he might want to add a page to the main part of the OCF web site.

I will also answer any other questions related to taxation as long as you keep it to U.S. Federal income tax.

I am not a medical doctor but I am a Tax "doctor" and if I can help anyone save tax dollars, I'm sure that will come in handy.

Feel free to e me with non medical related tax questions.

My profession will require a disclaimer attached to every response and of course this site disclaims any responsiblity for any response I offer. Remember I am offering my services for free to help fellow posters so lets see where this goes.

O.K., here's one- Tonite we wil travel to Batesville, Ar. to spend the night in a motel, so that we can have John at Chemo at 7:30 am tomorrow and then have a place for him to rest before an early afternoon appt. with a Rad oncologist. Is our overnight stay in the hotel deductible? I am also taking my daughter, who is an RN, because I do not feel comfortable being in a motel alone with him in his present condition. Amy in the Ozarks. By the way, this is a good idea.

Amy, I have no idea about the motel, but I have been deducting mileage to and from appointments for years. If you are not doing this already, it would be a good thing to keep track of as it can really add up.

Yep, 7620 miles in 2006 to chemo and Ent appts. :rolleyes: Amy

Amy of Oz,

1. Travel (local as well as non local) and Lodging essential for medical care is deductible.

2. Mileage is deductible at 18 cents per mile with no yearly limit.

3. Lodging for all 3 of you is allowed but capped at $50 per person per night with no yearly limit.

4. Food, however is not deductible.

5. Remember all medical expenses on filed on Sch A.

Sorry it took so long to get back to you. I was in court today.

David, quickly reassure us that you were in court defending a client, not in court defending yourself!

Pete,

O ye of little faith.

Yes, I was getting paid handsomely, not the other way around.

David,
When adding up the medical expenses for the year, can you include the medical expenses that were paid for out of a Health Care Spending account from work?
The kind that you decide how much you want in the account for the year, then it comes out of each paycheck and is not taxed.
Thank you.

Amy,

I get to answer your question about the hotel

YES ! Just make sure you have the receipt.

Mike G,

No,

In an employer sponsored health care plan the amount you have taken out of your pay is in pre tax dollars so when it is disbursed to a health care providor you have, in essence, already taken the deduction for it. In fact, when it is subtracted from your pay it is as if you are getting a deduction for it.

This arrangement is much better for you in this respect since you don't have to meet the filing limits of itemizing your deductions nor the 7.5% of your Adjusted Gross Income limit you must exceed if you do itemize your deductions.

Taxpayers may also be able to set up Health Savings Accounts (HSA's) and contribute tax deductible dollars each year. HSA's are a type of medical savings account set up to pay for qualified medical expenses of individual(s) covered by a High Deductible Health Plan. These contributions also do not need to meet or exceed the above limits and are therefore much more benefical to the taxpayer.

DM32,

Please note that there are rules for who may travel with the "patient" and the maximum per night allowance per person and the purpose of the travel.

In answering questions of law, especially Tax Law, you must often qualify your yes, no or maybe with numerous rules or limits. Only knowing the exact circumstances surrounding the question can tax practioners sometimes say yes without the urge to talk for another 10 minutes about why it might not be yes.

David, can supplies like ensure, boost, flavored water, etc be deducted if it was not perscribed by a dr.? Bill B

Talbill,

Generally non prescription drugs and over the counter drugs are not deductible but....

there is an exception for nutritional supplements if they are recommended by a medical practitioner for a condition diagnosed by a doctor.

Therefore since we all are told to get Ensure, Boost and VHC, etc and they are nutritional supplements, I would take the YES postion.

NO to the flavored water for the same reasons.

NOTICE PURSUANT TO INTERNAL REVENUE SERVICE CIRCULAR NO. 230
As required by Internal Revenue Service Circular No. 230, please be advised that any advice that may be contained in this communication is not intended or written to be used, and may not be used, by a taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer.

David,

A couple of tax questions: Is there an amount that you must go over before you can claim medical expenses?

What do you think of Turbo Tax or H&R Blocks Tax cut? Which is better? If you don't want to answer me publicly you can email me.

Tim

David,

Thanks for the information. I answered but then hit the wrong button with out the rest of information.

I was able to claim Hotel, Motel last year when I had to move to where my treatments were. Sorry I did not explain sooner for others to understand situation.

Thanks,
Diane

Before you can take any Medical deductions you must first itemize your deductions and then the medical has to exceed 7.5% of your adjusted gross income, so if you can't itemize, it's all academic.

Remember when you are adding up medical to include the cost of your insurance including dental. The bills and mileage eligible are for the entire family, not just cancer patient. Dr ordered medical supplies like suction machines, commodes, prosthesis, new teeth are allowable, but not things like diapers, gloves, or other non pecsription items.

Make certain you keep good records. If you know ahead that you will be taking the deduction because of a large expense like teeth, it is much easier to keep the records rather than trying to reconstruct them in April.

I'm not a tax accountant, but have managed to file for medical a few years because of high cost of dental expenses. David, please correct me if any of what I stated is wrong.

Eileen

Tim,

Unless you are taking a deduction for medical expenses under a Archer MSA (Medical Savings Account) or the HSA breifly discussed above, you must itemize your deductions to claim your medical expenses.

Everyone gets a "standard deduction" and it only benefits you to itemize if your total itemized deductions exceed your standard deduction.

Standard deduction amounts are :

Single $5,150
Married filing joint $10,300
Married filing seperate $5,150
Head of household $7,550

Next you would want to compare the total of all your itemized deductions to the above totals. The most common deductions to itemize are:

State income taxes or sales tax
Real estate taxes
Mortgage points and interest
Contributions
Medical expenses

For Medical expenses however you can only include the amount of medical expenses that exceed 7.5% of your Adjusted Gross Income which is Line 37 on the form 1040.

As far as packaged tax software, I can't help you because I've never seen those running. I would caution everyone however that CPA's spend thousands of dollars a year on our tax software and even our software is not without problems that only full time tax practitioners could detect and know how to make the forms do what their supposed to do.

Every year I get new clients that have prepared their own returns that I end up Amending their returns and getting them thousands of dollars in refunds. The Tax Laws are extremely complicated and change often. For example...In December of 2006, Congress passed a bill that extended some tax benefits that were set to expire 12/31/06. The IRS had already printed the 2006 forms and said "we're not reprinting them". So they told tax pratitioners what lines to use for these "Extender Provisions" and how to tell them, the IRS, what we were deducting on that particular line. Anyway my point is that if I weren't a CPA who also specializes in taxation I wouldn't even try to prepare my own return unless I only had W-2 source income and used the standard deduction.

NOTICE PURSUANT TO INTERNAL REVENUE SERVICE CIRCULAR NO. 230
As required by Internal Revenue Service Circular No. 230, please be advised that any advice that may be contained in this communication is not intended or written to be used, and may not be used, by a taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer.

David,

I'm a CPA who specializes in taxation, and I don't even prepare my own (joint) return -- because I specialize mostly in corporate taxes, which are quite different, as you know! You're absolutely right about the convoluted state of the tax laws in general and the fact that it can be risky to take a software package at face value.

Cathy

Eileen,

Everything you said is valid. I'll refer the tough questions to you. LOL

David,

Can the premiums I've paid for AFLAC Cancer Insurance be used as a deduction along with the regular medical and dental?

Thanks.
Vicki

Vicki,

If these are premiums for medical insurance, Cancer or not, they are deductible as a medical expense.

David C Hastings, CPA, PA
2207 54th St S
Gulfport, Fl 33707
O 727-322-0909
F 727-322-0520

NOTICE PURSUANT TO INTERNAL REVENUE SERVICE CIRCULAR NO. 230
As required by Internal Revenue Service Circular No. 230, please be advised that any advice that may be contained in this communication is not intended or written to be used, and may not be used, by a taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer

David putting your information out on a pubic web site that gets millions of hits may not be the most proudent thing to do. I will take it down if you wish. It is a generous service that you are providing to everyone, it is very kind of you to put this effort into helping others.

Brian,

So far I am comfortable with the questions and my generic answers. I have answered a few more specific questions off post as well but again I feel OK about it. It's OK with me if it's OK with you.

Hey, if anyone gets litigious, I'll just give them my cancer.

I meant your personal phone numbers etc. I would hate for you to get it put on some kind of list that is sold to telemarketers or who knows what....

Thanks David! I have found this thread to be very usefull and since I couldn't sleep anyway tonight I might as well get my tax stuff together Best wishes to you - Kris

Brian,

Thanks for the thought but I think everyone in the world already has all that info anyway judging by the telephone calls my office already gets.

To All,

I did agree to answer any tax questions including non medical related ones and I said to post the non medical ones off site but I have been getting medical tax questions off site that would have been a benefit to the group.

Please post medical related tax questions, unless their private in nature, to this Board.