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Posted by CMORE on February 5, 2007, 8:22 pm
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I'm getting ready to do my 06 taxes soon and wanted to make
sure I have everything in order. According to the IRS's
website these are the laws that apply to claiming medical
expenses.
Summary:
"You may deduct only the amount by which your total medical
care expenses for the year exceed 7.5% of your adjusted
gross income"
Ok, basically I spent all my savings last year after a
terrible snowboarding injury blew my heal apart. I ended up
spending 23,000 out of pocket on Medical bills last year. I
made about 44K after taxes. So here is the formula
MED EXP:
24K
Income:
44K
7.5% of my AGI =3,300
So, 24,000 medical - 3,300 = 20,700.
These are my Medical expenses Exceeding 7.5% of my AGI:
This would amount to a write off of $20,700 I suppose
Is this the correct? Can I expect to IRS to just pay me all
this? Also, would I just use a 1040 in addition to the Form
1040, Schedule A to itemize my medical expenses? Also, on
the Form 1040, Schedule A at the top it says medical and
dental expences in colum one and > (see page A1). What is
page A-1 and where is it? Is this where I list all my
itemized deductions? I have proof of all my bills. I haven't
yet tried to fill out the forms but I need to know which
ones I need to use. It seems rather simple. Should I see a
tax specialist or get turbo tax or something like that?
Thanks for any/all help. I used to just use taxbrain to file
when I would do basic 1040EZ.
Regards,
Chris
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Posted by Phil Marti on February 6, 2007, 9:39 pm
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> I'm getting ready to do my 06 taxes soon and wanted to make
> sure I have everything in order. According to the IRS's
> website these are the laws that apply to claiming medical
> expenses.
>
> Summary:
> "You may deduct only the amount by which your total medical
> care expenses for the year exceed 7.5% of your adjusted
> gross income"
>
> Ok, basically I spent all my savings last year after a
> terrible snowboarding injury blew my heal apart. I ended up
> spending 23,000 out of pocket on Medical bills last year. I
> made about 44K after taxes. So here is the formula
>
> MED EXP:
> 24K
>
> Income:
> 44K
>
> 7.5% of my AGI =3,300
> So, 24,000 medical - 3,300 = 20,700.
> These are my Medical expenses Exceeding 7.5% of my AGI:
> This would amount to a write off of $20,700 I suppose
>
> Is this the correct?
Nowhere near. Rather than trying to figure it out from
words, get yourself the 1040, Schedule A, and the 1040
isntructions, which include the instructions for Schedule A
(pp A-1, etc.)
> Can I expect to IRS to just pay me all
> this?
No. The best you can hope for is a refund of everything
withheld (box 2 of your W-2).
--
Phil Marti
Clarksburg, MD
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by boasted on February 6, 2007, 9:39 pm
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> I'm getting ready to do my 06 taxes soon and wanted to make
> sure I have everything in order. According to the IRS's
> website these are the laws that apply to claiming medical
> expenses.
>
> Summary:
> "You may deduct only the amount by which your total medical
> care expenses for the year exceed 7.5% of your adjusted
> gross income"
>
> Ok, basically I spent all my savings last year after a
> terrible snowboarding injury blew my heal apart. I ended up
> spending 23,000 out of pocket on Medical bills last year. I
> made about 44K after taxes. So here is the formula
>
> MED EXP:
> 24K
>
> Income:
> 44K
>
> 7.5% of my AGI =3,300
> So, 24,000 medical - 3,300 = 20,700.
> These are my Medical expenses Exceeding 7.5% of my AGI:
> This would amount to a write off of $20,700 I suppose
>
> Is this the correct? Can I expect to IRS to just pay me all
> this? Also, would I just use a 1040 in addition to the Form
> 1040, Schedule A to itemize my medical expenses? Also, on
> the Form 1040, Schedule A at the top it says medical and
> dental expences in colum one and > (see page A1). What is
> page A-1 and where is it? Is this where I list all my
> itemized deductions? I have proof of all my bills. I haven't
> yet tried to fill out the forms but I need to know which
> ones I need to use. It seems rather simple. Should I see a
> tax specialist or get turbo tax or something like that?
> Thanks for any/all help. I used to just use taxbrain to file
> when I would do basic 1040EZ.
Actually the 44K was my total income (including taxes).
Someone throw me a bone here! Help me out please. Thanks
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Paul Thomas, CPA on February 6, 2007, 9:39 pm
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> I'm getting ready to do my 06 taxes soon and wanted to make
> sure I have everything in order. According to the IRS's
> website these are the laws that apply to claiming medical
> expenses.
>
> Summary:
> "You may deduct only the amount by which your total medical
> care expenses for the year exceed 7.5% of your adjusted
> gross income"
>
> Ok, basically I spent all my savings last year after a
> terrible snowboarding injury blew my heal apart. I ended up
> spending 23,000 out of pocket on Medical bills last year. I
> made about 44K after taxes. So here is the formula
>
> MED EXP:
> 24K
>
> Income:
> 44K
>
> 7.5% of my AGI =3,300
> So, 24,000 medical - 3,300 = 20,700.
> These are my Medical expenses Exceeding 7.5% of my AGI:
> This would amount to a write off of $20,700 I suppose
On Schedule A, yes.
> Is this the correct? Can I expect to IRS to just pay me all
> this?
No. The government doesn't pay you back your medical
expenses. You get to reduce your taxable income by that
amount. It results in a smaller amount of tax due, which
means a larger refund in your case.
> Also, would I just use a 1040 in addition to the Form
> 1040, Schedule A to itemize my medical expenses?
Yes.
> Also, on the Form 1040, Schedule A at the top it says medical and
> dental expences in colum one and > (see page A1). What is
> page A-1 and where is it? Is this where I list all my
> itemized deductions? I have proof of all my bills. I haven't
> yet tried to fill out the forms but I need to know which
> ones I need to use. It seems rather simple.
You've got half of it figgured out, just follow the
instructions.
> Should I see a tax specialist or get turbo tax or something like that?
> Thanks for any/all help. I used to just use taxbrain to file
> when I would do basic 1040EZ.
Well, now that you have a snowboarding injury, you get to
move up to the bigger form.
--
Paul Thomas, CPA
paulthomascpapc@bellsouth.net
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Helpful One on February 6, 2007, 9:39 pm
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> I'm getting ready to do my 06 taxes soon and wanted to
> make
> sure I have everything in order. According to the IRS's
> website these are the laws that apply to claiming medical
> expenses.
>
> Summary:
> "You may deduct only the amount by which your total
> medical
> care expenses for the year exceed 7.5% of your adjusted
> gross income"
>
> Ok, basically I spent all my savings last year after a
> terrible snowboarding injury blew my heal apart. I ended
> up
> spending 23,000 out of pocket on Medical bills last year.
> I
> made about 44K after taxes. So here is the formula
>
> MED EXP:
> 24K
>
> Income:
> 44K
>
> 7.5% of my AGI =3,300
> So, 24,000 medical - 3,300 = 20,700.
> These are my Medical expenses Exceeding 7.5% of my AGI:
That's the correct calculation.
> This would amount to a write off of $20,700 I suppose
Yes, if by "write off" you mean you will not have to pay
income tax on $20,700 of your income. It however does not
mean that the government will give you $20,700 as your next
paragraph implies. "Form 1040, Schedule A - Itemized
Deductions" is where you itemize deductions from income. You
use it when all of those items the IRS allows you to deduct
from income exceed the standard deduction which your filing
status will permit. The IRS allows you to deduct medical
expenses for which you are not reimbursed or not paid by
others, medical insurance costs that you pay, dental
expenses, etc. for you and your family (if any) subject to
the 7.5% limitation. They also allow you to deduct other
items as described on Schedule A. This year it appears that
you will want to itemize rather than use the standard
deduction. Make sure you include all those items that they
will allow you to itemize and are applicable to you. For
me, I find the instructions on how to fill out Schedule A is
described on pages A-1 through A-7 of the 1040 tax package
that IRS sent me in late December. It is to one of those
pages that the "(see page A1)" refers to. Depending on
which package they sent you, you may have to acquire a copy
of those instructions from your library, IRS website, or
other source. Even if your going to use tax software or a
professional preparer, you'll probably want to get a copy so
that you assemble the correct information and will
understand what itemizing does.
Once you have totaled all of your itemized deductions at the
bottom of Schedule A, you also enter this total on Form
1040, line 40. On Form 1040, this will permit you to
substract the total itemized deduction amount and your
personal exemption from your AGI to arrive at your "Taxable
Income".
With respect to your proofs of all your bills, keep them in
your records in case IRS needs to see them later. All they
need to know now is their totals.
Forms 1040 and Form 1040 - Schedule A will satisfy the
requirements to cover those items associated with your
medical expenses and other itemized deductions as you
discussed here. You may also have to include other
Schedules or forms to cover items of income or situations
which you did disclose here.
Based on the overall context of your statements and
questions and reference to the type of forms you have filed
in the past, you may want to consider preparation of this
year's tax forms by a tax professional. You want to take
advantage of all the itemized deductions you can and I get
the impression that this is new to you.
Unfortuately, you've had to spend an extra $23,000 to have
the amount of your taxes reduced probably somewhere between
$2,300 to $3,000 from what they would have been had you not
suffered your accident. Hope you've recovered physically
from it and it's only the financial recovery that will take
a little longer.
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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