TAX EXPERTS?? Medical bills question??

[HillStreet]

Ah, got it. Thanks Steve.

 

[randy41]

you have no other deductible medical expenses? you have enough itemized deductions otherwise to beat the standard deduction?

 

[LD1]

It would be 10% for me.

And next years outcome looks about the same as this year. If anything, maybe a little less with starting this new job. his year I spent 24 weeks on UE unfortunately, But the rest of the year was working lots of hours at a new company and making lots of OT, not to mention a killer severance from my old company that closed down. So even with 24 weeks UE, I should still be within pennies of last years AGI. Next year might be a little less.

I dont look for the 10% to change though. Since they just changed it from 7.5% to 10% last year (if I read that right).

But if having to itemize is a must, that may be the deal breaker right there. I dont even come close to the standard 12.2k for married couples anymore. Low interest rates not owing alot, and 10year loan on the house did that. Last year, taxes and mortgage interest was under 5k combined. so in order to get to the 12.2k, I need lots more to itemize. And 11k of med bills that I can only claim a couple grand of, just dont put me close to 12.2k.......

 

[LD1]

Oh, no good way of separate filing either. I make about double what my wife does. So even if I could itemize and meet the lower number by filing separately, I end up in a higher bracket and it would cost about 2k more. My tax guy always runs the numbers, enters all the itemizations (computer figures the best way, itemize or standard), and then we get the results. Then he clicks a button to split the returns and the sum of them is always a few thousand worse.

 

[randy41]

if you don't itemize this isn't an issue. if you have a high deductible health insurance plan then you can open a health savings account. that gives you an above line deduction. then you pay the bill out of there. i think the maximum contribution to a health savings plan for family coverage is $6450 for 2013. whether this is available to you or not is something you should discuss with your tax guy.

 

[LD1]

We did contribute to the HSA but not nearly enough. Partly cause I was on UE for the bulk of the last 6 months, and with my wife being the only one working and carrying insurance, she was already down to bringing home less than 1k a month. And our bills are about 2x's what I was expecting. We had to spend 2 days at childrens hospitals for jaundice.

The money isn't really an issue. I have enough put back for this. But wanted to make the best decision for taxes. Seems its a non issue now if itemization is a must. I didn't catch that anywhere I'm my research.

 

[dmccarty]

Not sure it's 10%, I think it is actually 7.5% reported on 1040 schedule A. That makes the amount over 7.5% of AGI a deduction, not a credit. As others have mentioned, associated costs such as mileage, health care premiums, etc are deductible too. (Might be certain modifications or exemptions for health spending accounts, or pre-tax premium deductions). I am not a tax preparer, only learned this doing my own taxes. By the way, I am usually only close to the deduction, but always seem to be just under the threshold.

The thresh hold used to be 7.5% but Obama Care raised it to 10%.

Later,
Dan

 

[SPIKER]

LD1 With the UE and the like this year I would put of paying till after the 1st. Put the medical on next years taxes and perhaps have a better chance of having the % needed to take Itemized deductions over the standard deduction. I have been doing my own taxes for um pretty much ever, and in all my times only had 2 years where I could itemize mine. That was back in first or 2nd year of owning the farm, only because I had variable rate that increased first 3 years of the loan & ended up paying my own health insurance on Cobra account for those two years after leaving one job.

You went onto the wifes insurance correct? you didn't pay cobra from the job that went under>?

Mark

 

[LD1]

Nope. No cobra. And since the premiums are a pretax deduction, they aren't deductible I believe.

Last time I was able to itemize and it worked out was about 6 years ago. 30 year loan, and 6ish percent interest. And standard deduction was lower. Not married ( so standard was really low)

With being married, and 3% for 10 years, I lucky to come up with 7k deductions. If I wasn't married, I'd still meet the lower 6k standard deduction for singles. But no where near the 12.2k for being married

 

[randy41]

instead of looking at the tax angle of this i would try to save money by offering to pay the bill in full immediately for a discount.