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Wendy Reed
Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3345
Experience:  15+ years tax preparation and tax advice.
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Hi, I dont know how to deduct medical expenses. I understand

Customer Question

Hi,
I don’t know how to deduct medical expenses. I understand that I can claim medical expenses after I reach 7.5% from my gross income. My first concern is can I count insurance premiums that my employee automatically deducts from my pay check? In other words, I have a family plan and pay almost $6k out of pocket annually for health, dental and vision insurance.
Another problem I don’t have all receipts. Can I use summary information from my insurance company instead?
My family members had 2 surgeries in 2010 and we still didn’t pay hospital bills in full and may pay the rest this year. How much money I can claim now on tax return in this case? Can I deduct and how I can count miles I drove when my daughter was in hospital?
Do I need special forms or permit from IRS before I begin claim medical expenses or I can put all information in TurboTax and file electronically?
Any other advices or additional reading will be appreciated.
Thanks, Nick
Submitted: 3 years ago.
Category: Tax
Expert:  Wendy Reed replied 3 years ago.

Thank you for giving me the opportunity to assist you. I will give the best answer that I can with the information provided.

 

Hello and thank you for your questions. As you probably know, 7.5% of your gross income is a lot, and that is a large threshold to cross.

 

Regarding Insurance payments through your employment----generally, most insurance premiums for health, dental and vision are taken out of your pay on a PRE-TAX basis, because this is allowed by federal law. If this is the case, in effect, you are already having these payments deducted from your federal income, and cannot take a deduction for them again on your tax return. If you are not sure if your health insurance premiums are deducted on a pre-tax basis, you will need to ask your human resources department.

 

Regarding all medical deductions, you can add up prescriptions, copays, hospital stays, dental bills, vision, glasses, contacts, braces, etc. etc. However, you can only deduct what you actually pay in 2010. If you do not have the receipts, insurance statements are a good place to start, but if you were ever audited you would still need to prove that you paid the expenses. You can usually regenerate or ask for receipts for medical bills in the case of an audit, from the doctor, pharmacy, etc.

 

Medical mileage is 16.5 cents per mile in 2010. All medical trips, even going to the pharmacy to pick up a prescription can be counted. Tolls and parking related to medical trips can be counted as well.

 

You do not need a special form for medical deductions. You can enter your medical expense information into Turbo Tax and the program will do the calculation. Schedule A is where medical expenses are taken.

 

You may wish to refer to Pub. 502 for a more complete list of medical deductions and more information. http://www.irs.gov/pub/irs-pdf/p502.pdf

 

 

 

Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3345
Experience: 15+ years tax preparation and tax advice.
Wendy Reed and 6 other Tax Specialists are ready to help you
Customer: replied 3 years ago.
If I got it right, my insurance premiums were deducted on pre-tax basis and I cannot count them as insurance premiums to hit 7.5% of AGI.
Insurance summary paper is not good for tax audit but I can use it for tax return anyway. BTW, what is the period for tax audit? I must revisit every doctor, pharmacy and hospital for receipt with a precise amount I paid in case of the audit.
Is there any account (not HSA and not flexible spending) that I can use as a credit card for medical expenses? It should be valid for medical payments only. In that case I will always have all my receipts in one place.
Thank you, Nick
Expert:  Wendy Reed replied 3 years ago.

Hello Nick,

The audit time period is generally three years after the due date for most returns. The audit period can be extended for fraud or a gross understatement of income.

 

I am not aware of any credit card for medical use other than a flex spending card, but you could certainly get a card just for medical use.

 

You should get into the habit of asking the provider for a receipt every time---they won't like it, but you are the customer. Make a folder that you can put all medical receipts in.

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