Tax question?

This whole cancer thing started in june. I will have 90% of the treatment done by Jan 1. I am wondering how to go about trying to claim all this stuff on my taxes. Has any one gone through this and were able to claim heath expenes on there tax form?

David is the expert.

As far as I know, you will need to file the long version in order to claim write offs. There are thresholds to meet and then you get a percentage of all your years medical expenses to help offset the amount of tax you owe. You will need to file the long version in order to claim write offs.

I believe it must be % of your adjusted income. That's what our accountant said.

Absolutely,

Between your premiums (all premiums...health, dental, vision, long term care), your deductibles, mileage roundtrip (get a calendar and chart all doctor/health facility visits..last year was 19 cents a mile), drugs, and any non-covered medical expenses, you can rack up a bunch in a year and a percentage of that is deductible. I will let the tax experts explain that percentage in case it has changed but for me last year it was anything above 7.5% of our adjusted gross income.

Bill is retired on Medicare. I am employed part time with no health benefits and under 65 so I have to pay for private health insurance. Even this past year with relatively few doctor visits, our total medical expenses were over $12,000 and we were able to deduct $7500 of that.

So, it is now well worth my time to gather all this info for tax purposes.

Deb

DavidCPA is the resident Tax expert. But to deduct medical expenses you have to itemize your deductions on Schedule A rather than take the standard deduction. If are deducting your mortgage interest payments, then you are already filing Schedule A.
After this tax year of 2012, the percentage goes up from 7.5 of your Adjusted Gross income (AGI) to 10% of what you need to exceed to take the deductions ((for taxpayers 65 and older, it stays at 7.5% through 2016). Here is a link to an IRS tax sheet that spells it out topic 502
Each year the IRS updates a full publication on taking this deduction. Here is the most current one
irs pub med deductions with lots of detail
The key is to start now gathering all this info and use the topic list and the extensive lists in the publication to be sure you do not miss any. Each year, I rack up about $15,000 in deductions (it'd be more but my BC/BS has a $6,000 catastrophe limit that I easily hit) although I don't get to deduct all of it, it does help.
charm

Long form???? Christine that language went out 100 years ago! lol Anyway Charm is correct. One must itemize their deductions to claim any medical expenses as Deb has listed out so nicely. The BIG problem is the 7.5% of you AGI (Adjusted Gross Income) that one must subtract before you can include any remaining medical expenses as an Itemized deduction. Only if the sum of your Itemized deductions exceeds the Standard deduction you are entitled to does it make sense to use Sch A. Also note that you must PAY these expenses on or before Dec 31 to claim them but paying them by credit card is considered payment even if you don't pay the CC balance off for years.

I have for the last 5 years (6 counting the 2012 filing season) offered to prepare or even help prepare any member's tax return for FREE so if you or anyone is interested PM me. I do ask that in return for my services that you make a contribution to the OFC. No minimum and of course no maximum.

The big question I have is I spent $7,414 in premiums, and about $7,000 out of pocket, 2 kids braces, wife surgery. So about $14,000. The premiums are excluded from fed wages. I will be above 7.5% of AGI. Is everything above 7.5% deductable of the $14,000?

As for what to include
Co pay
Dr bills
Hospitol bills
Transportations milage
Supplies. (Boost???)

Do you just add them up and post to sch A? Or do you need proof of everything?

Just like any other income tax item, documentation should be there in case you are audited. Good sources of that are:

Credit Card Statements

EOB's (Explanation of Benefits) from each physician as this will have Dates of Service so you can do your mileage calendar.

Billing statements from insurance companies for premiums.

Pay stubs with a year to date figure for medical deductions.

Actual receipts

Drug stores such as Walgreens and CVS can provide an annual statement of prescription purchases.

If you do Online Bill Pay thru your bank, you can document payments to one payee during the year such as an insurance premium.

Hope this helps and thanks to DavidCPA for the bottom line on medical deductions.

Deb

Good question, good answers. Your offer is a nice gesture, David.

Hockey Dad,

If your Med Ins Prems are not paid by you in "after tax dollars" then they will not be included in what you can deduct. I would have to see either your pay stub or your W-2 or know more about your statement..."The premiums are excluded from fed wages."

True about the documentation but one's "average" chances of being audited are less than 2% so do your best but don't stress out over this. Also, absent fraud, the IRS can only audit your return generally for 3 years.

Man David,

You are way easier than my CPAs have been. I have always felt the onus from them to have really good documentation.

As much as they would like us to, CPA's in private practice don't yet work for the IRS. I accept what my clients tell me and I advise them to keep whatever support they have just in case but in reality they will usually just throw all those records away after 3 years.

David,
My premium are paid pre tax. They do not show up in my fed wages reported on the W2. It is a fluke that the company I work for has us pay our premiums and deduct it from our annual bonus.

What a pain in the Neck. Just kidding. I will tally up what I can and go from there.

Hockey Dad,

My wife says that CPA stands for Certified Pain in her Ass so forgive me if I appear that way but I am still not clear on whether or not you could use your insurance premiums in the total for medical expenses as you have said 2 things that I find confusing....

"The premiums are excluded from fed wages" and "It is a fluke that the company I work for has us pay our premiums and deduct it from our annual bonus."

If your wages are taxed for SS after your insurance premiums are excluded then you can't deduct them "twice". If you are saying that they just reduce your pay check after all taxes which are based upon your gross pay then you can deduct them.

I don't understand the last statement.

Just trying to help but that doesn't make my wife feel better either. lol