Tax Itemization

[sarsar 824]

We pay a CPA that does our taxes every year, he has done our taxes for the last 6 or 7 years and we deducted a portion of the surgery and travel expenses. We couldn't deduct all of it, maybe we made too much money??? He said it did not matter that the surgery was done outside of the US.

[KristinaAshley 5]

Hate to break the news...but if you get this done out of country....you can't deduct.

• I can't deduct interest paid on mortgage interest paid outside US.
  
• I can't deduct sales tax paid outside of US.
  
• I can't deduct medical procedures done outside of US.
  

Go ahead, play with the IRS. See who wins.

Good news is the benefits outweigh any tax deduction.

YOU CAN DEDUCT IT..... PLEASE READ IRS PUBLICATION 502!

[Rootman 1,101]

Yes, you can and I did, as well as the airfare to and from.

First, as previously stated, you MUST itemize your taxes, if you fill out the 1040EZ or 1040A then you don't itemize so you get NO benefit.

Second you can only deduct the amount that is OVER 7.5% of your adjusted gross income, NOT the whole thing. So gather up ALL your medical expenses and add them up, if they don't add up to MORE than 7.5% of your gross income then you can't deduct them.

The deduction is just that, a DEDUCTION. You do NOT get "the whole thing back" or even the amount above the 7.5% (see point above) you get the amount OVER the 7.5 reduced off your adjusted gross income, so that means you don't pay taxes on the amount of money you are allowed to deduct. So if you pay 20% in federal income taxes you won't have to pay the 20% tax on the amount you can deduct. So you don't "take off" the full amount, or even the amount above 7.5% of your gross income you just don't have to pay taxes on the amount you can deduct.

Let's say you make $100,000 (we'll use easy numbers even though they don't represent most users real income). IF you have more than 7.5% in qualified medical deductions - that is OUT OF POCKET eligible medical expenses - of MORE than $7500 you can reduce your taxable income by the excess. Say you have $10,000 in medical expenses YOU paid for. You can put a deduction on your tax form of $2500 - that's the $10,000 LESS the 7.5% or $7500. That means you WILL NOT pay taxes on the $2500. So if you pay 20% in taxes you will reduce your tax payment by $500 - which is 20% of $2500. If you already get a refund, your refund will be $500 MORE, if you owe taxes on something else then this goes toward paying that tax bill.

There is a way around this for SOME, if you have a qualified HIGH DEDUCTIBLE insurance policy the government allows you to save - tax free - in a Health Saving Account (HSA) and pay for any QUALIFIED medical expenses from in, in essence not pay taxes on ALL your medical expenses that you pay using the HSA.

See a tax expert for more details.

[suegirl 109]

Yes, you can and I did, as well as the airfare to and from.

First, as previously stated, you MUST itemize your taxes, if you fill out the 1040EZ or 1040A then you don't itemize so you get NO benefit.

Second you can only deduct the amount that is OVER 7.5% of your adjusted gross income, NOT the whole thing. So gather up ALL your medical expenses and add them up, if they don't add up to MORE than 7.5% of your gross income then you can't deduct them.

The deduction is just that, a DEDUCTION. You do NOT get "the whole thing back" or even the amount above the 7.5% (see point above) you get the amount OVER the 7.5 reduced off your adjusted gross income, so that means you don't pay taxes on the amount of money you are allowed to deduct. So if you pay 20% in federal income taxes you won't have to pay the 20% tax on the amount you can deduct. So you don't "take off" the full amount, or even the amount above 7.5% of your gross income you just don't have to pay taxes on the amount you can deduct.

Let's say you make $100,000 (we'll use easy numbers even though they don't represent most users real income). IF you have more than 7.5% in qualified medical deductions - that is OUT OF POCKET eligible medical expenses - of MORE than $7500 you can reduce your taxable income by the excess. Say you have $10,000 in medical expenses YOU paid for. You can put a deduction on your tax form of $2500 - that's the $10,000 LESS the 7.5% or $7500. That means you WILL NOT pay taxes on the $2500. So if you pay 20% in taxes you will reduce your tax payment by $500 - which is 20% of $2500. If you already get a refund, your refund will be $500 MORE, if you owe taxes on something else then this goes toward paying that tax bill.

There is a way around this for SOME, if you have a qualified HIGH DEDUCTIBLE insurance policy the government allows you to save - tax free - in a Health Saving Account (HSA) and pay for any QUALIFIED medical expenses from in, in essence not pay taxes on ALL your medical expenses that you pay using the HSA.

See a tax expert for more details.

You sir, are my new hero for explaining that so simply..

[Baby Beluga 10]

Awewome and thank you for clarifying this issue. I'm sure it will help many...