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taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 423
Experience:  Licensed CPA, MA, MST with 29 year's experience. Teach Accounting and Tax courses at Masters level.
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If someone gives you money and u use it for medical bills can

Customer Question

If someone gives you money and u use it for medical bills can u write it off on your taxesfor medical
Submitted: 1 year ago.
Category: Tax
Expert:  taxmanrog replied 1 year ago.

Welcome to Just Answers! Thank you for giving me the opportunity to assist you! I will do my best to help!

 

There are actually two separate issues here. The first one is someone giving you money. That action is not taxable to you, but it could be reportable, and perhaps taxable, to the person who gave you the money.

 

The medical bills are the second issue. You can deduct as an itemized deduction any qualified medical expenses that exceed 7.5% of your adjusted gross income (AGI). These expenses include things like doctor bills, dentist bills, medication, hospitals, home health care, etc. They also include health insurance if the premiums are paid with after tax dollars (i.e, not pretax through a work plan).

 

If you have, for example, $65,000 of wage income, and another $1,000 in dividends and interest, your AGI is $66,000. In order to have any deductible medical expenses, your medical bills would have to exceed $4,950. So if you had $8,200 of medical expenses, you could deduct $3,250 ($8,200 - $4,950 = $3,250).

 

I hope this answers your questions! If you have any more, including any regarding particular medical costs (my wife has stage 4 cancer, so I have learned more about medical expenses than I ever wanted to in my life!), please feel free to ask away!

 

Again, thanks! Enjoy your Sunday!

 

Roger

Customer: replied 1 year ago.
Sorry to hear about your wife. My hubby is self employed so yes our medical we can write off but we were making sure we could include those bills as well
Expert:  taxmanrog replied 1 year ago.

Thank you. Life throws curve balls to everyone! My wife just turned 37. We found out in March she had cancer, I proposed in April, we were married in May. She continues to fight, which is all I can ask for. It is a horrible disease!

 

There is one change to what I told you. Starting in 2013, the medical expenses have to exceed 10% of AGI, not 7.5%. I am still working on 2012 tax returns, so this year is still 2012 for me. Sorry about that! Everything else is as I stated.

 

If you are 65 or above, the 7.5% of AGI rule is still in place through 2016 tax returns. In 2017 the medical costs have to exceed 7.5% of AGI for everyone.

 

Since your husband is self-employed, he can write off his medical insurance expenses, to the extent he has income, "above-the-line" as an adjustment to arrive at AGI.

 

I hope my answer has helped you! If it has, please rate me highly. I would appreciate it!

 

Again, thanks! Enjoy your Sunday!

 

Roger

Customer: replied 1 year ago.
I think you may be missing my question. I know we meet the criteria for witting off our medical but when I add the totals fr the expenses can I include the medical bills that we paid with the gift cards/ cash
Expert:  taxmanrog replied 1 year ago.

Yes, you can still deduct the expenses. The method of payment does not affect its deductibility. In fact, if you paid for it on a credit card in 2013, and did not pay off the credit card bill until 2014 or beyond, you can still deduct the expense in 2013.

 

Whether you use cash, check, money order, PayPal, gift cards, prepaid debit cards, anything, it does not matter. It is still a deduction on your tax return.

 

I hope this clarifies things. If you have any more questions, please ask. I will be happy to answer.

 

Again, thanks!

 

Roger

Customer: replied 1 year ago.
Thank you and my prayers are with you and your wife. She is a strong woman and lucky to have u by her side
Expert:  taxmanrog replied 1 year ago.

Thank you, XXXXX XXXXX am the lucky one. She is truly an amazing woman!

 

Good luck to you as well! The fact that you have deductible medical expenses mean that you have had some issues as well, and I will keep you and yours in my prayers as well!

 

Roger

taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 423
Experience: Licensed CPA, MA, MST with 29 year's experience. Teach Accounting and Tax courses at Masters level.
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taxmanrog
taxmanrog
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Licensed CPA, MA, MST with 29 year's experience. Teach Accounting and Tax courses at Masters level.