The Money Mustache Community

Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: trailrated on January 04, 2015, 01:03:33 PM

Title: Medical deductions on tax return
Post by: trailrated on January 04, 2015, 01:03:33 PM

Does anyone have any experience with this? This is the first year I have actually spent a significant amount (roughly $7,000) on medical. I saved all the receipts from everything. How much does that lower my tax liability? Is it a certain percentage, not sure how it all works. Thanks!

Title: Re: Medical deductions on tax return
Post by: Abe on January 04, 2015, 01:49:26 PM

You may deduct the expenses if the total is more than 10% of your adjusted gross income. Assuming that is the case, then your taxable income will be decreased by $7000. If the total is less than 10%, you cannot deduct any of it.


http://www.irs.gov/taxtopics/tc502.html

Title: Re: Medical deductions on tax return
Post by: savedough on January 04, 2015, 02:33:20 PM

You can actually only deduct the portion that exceeds 10% based on my understanding.   So if you make $50K, you can only deduct $2K if you spend $7K

Title: Re: Medical deductions on tax return
Post by: catccc on January 04, 2015, 03:22:08 PM

Yes, it is only the amount that exceeds 10% of your AGI.  Also, you need to take itemized deductions to take the medical deduction.  It will reduce your taxable income the same way a dollar of other itemized or standard deductions would.

Title: Re: Medical deductions on tax return
Post by: LadyStache on January 04, 2015, 03:24:45 PM

I think you can also deduct mileage expenses for medical, so you may want to add that up, too.