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Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2392
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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hi...i have a tax question...

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hi...i have a tax question...i have a complicated medical situation going on and my doctors ideally would like me to go to a private clinic...the thing is the clinic doesn't accept insurance, it is cash only...with tests, it may run very many thousands of dollars...i was thinking of possibly putting it on some credit cards if i have room on them...my question is as this is a medical expense at an m.d. staffed licensed clinic, would this expense be tax deductible?...also, as this would have the potential to put me in the red, could this expense carry over to future years??---i think they call it a NOL?....so 1) would the entire medical expense be tax deductible in federal and state taxes? and 2) since it would put me in the red, would this carry over to future years so that my taxes in those years be nothing or reduced?....thank you.


Anne :

Hi

Anne :

Thank you for your question

Anne :

You may deduct any approved medical deduction such as is described in


2012 Publication 502 - Internal Revenue Service

Anne :

You would deduct these expenses IN THE YEAR THEY ARE PAID (or put on your cc) on Schedule A (Form 1040)

Anne :

So, if you were billed say, $20,000 but you only paid $3000 in the calendar year, then your deduction on Schedule A would be $3000

Anne :

Paying enough medical bills in 1 calendar year to put you "in the red" as you put it, gives you no future benefit.

Anne :

You can not carry any medical deductions that you paid in 1 year over to another

Anne :

The "net operating loss" (NOL) that you mentioned can only be generated from a loss in a business

Anne :

 


I truly hope this information is helpful but please do not rate until you are satisfied. If you want to click on 1 or 2 just click on the continue to work with me button instead. You will then be able to add any other info or respond to what I have posted so far. Rating 3-5 gives me credit and a good rating but you can still converse with me.


 

Customer:

hi...so if i put a majority on a credit card but pay only a portion, would the whole thing be deducted for taxes in the year paid, or just the amount i paid? meaning if it costs $20,000 and i pay $5,000 this year on it, but $7,000 next year, $4,000 in three years and rest is paid in four years, would i get to deduct for each year payment is made? or is the whole thing considered paid the year i put it on card and only deducted for that year, which would be this year?

Anne :

Whatever $ amount you put on your cc is considered "paid" , even if you have not paid the cc bill off.

Anne :

This is no different that if you put your utility bill for instance on your cc. Your utility company is paid by the financial institution that holds the cc, and if you don't pay your cc bill, then its an issue between you and your cc company

Customer:

hi...so if i were to put the $20,000 on a credit card, but only paid it over the next five years, could i deduct each year i was still paying off the charge? or is it only deductible for the year entire charge was made?

Customer:

thank you, XXXXX XXXXX it would only be deductible one time...thank you...let me think if i have any other question and then i will close out....

Anne :

I have some concern re: the type of medical place that you describe

Anne :

Please be sure that where ever you are going is deductible ....study the pub I referred you to

Customer:

hi...so in your example, you could claim the $3000 in one year, but if you paid the remaining $17,000 in later years you can't deduct it, you just lose it?

Anne :

No, you would claim the expenses as you pay them....however, please keep in mind that your medical expenses must be > than 7.5% of your AGI

Customer:

ok....thank you so much for the information....this is something i will need to seriously consider...this is one of several options and i just want to make sure i have all the info...thank you so much....

Anne :

You're most welcome

Anne :

You may always ask for me by name if I can help you again in the future.

Anne :

and thank you for using justanswer/Pearl

Customer:

i will....thank you so much.

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Please feel free to ask for me by name if I can help you in the future.