Income Tax Deductions Matter!

**MomToTwoBoys** · 03-01-2010, 06:04 PM

So last year, we didn't deduct any medical expenses from our taxes. We had about a $3400 return, but that was only about 45% of what was taken out of DH throughout the year.

This year, we went ahead and decided to make sure we had the deductions in hand. I lost a few of the receipts for DS11's medication, which sort of made me sad, but I had pretty much every other medical/dental receipt.

In total, we had $225 worth of medical/dental expenses (this was after inputting the payment amount and then the reimbursement). What did we get for that? Another $500 in our return.

We weren't able to take advantage of any child care credits or any home improvement deductions (even though it seems like we did a lot, we didn't do enough to warrant the tax credit), so it wasn't a deciding factor in our increased return. We also had $500 less taken out this year compared to the previous year.

So when they say to keep your receipts, they mean it!

Our return this year?

$3928

**Palooka** · 03-01-2010, 07:29 PM

I can't remember the exact amount, but it has to be pretty high before we can use medical expenses for tax deductions. That's no surprise.

But good for you.

**savvy_sniper** · 03-01-2010, 07:32 PM

You can get a report with medications and the amount paid online from most of the big pharmacies. If yours isn't available online, you can ask for a printout in person.

**ncarr** · 03-02-2010, 08:40 AM

Is the $250 what is deductible after subtracting 7.5% of your AGI? Because you can only deduct what cost you more than that.

From Publication 502 (2009), Medical and Dental Expenses :

How Much of the Expenses Can You Deduct?

You can deduct on Schedule A (Form 1040) only the amount of your medical and dental expenses that is more than 7.5% of your AGI(Form 1040, line 38).

In this publication, the term “7.5% limit” is used to refer to 7.5% of your AGI. The phrase “subject to the 7.5% limit” is also used. This phrase means that you must subtract 7.5% (.075) of your AGI from your medical expenses to figure your medical expense deduction.

Example.

Your AGI is $40,000, 7.5% of which is $3,000. You paid medical expenses of $2,500. You cannot deduct any of your medical expenses because they are not more than 7.5% of your AGI.

**Libby** · 03-02-2010, 11:08 AM

Originally Posted by savvy_sniper

You can get a report with medications and the amount paid online from most of the big pharmacies. If yours isn't available online, you can ask for a printout in person.

I was just gonna say - go back to the doctors office/pharmacy and ask for a reprint...they will gladly do it for you and it does show 'reprint' across the top but its still from the official pharmacy.

Go back and try to get more for your refund gf!!

**MomToTwoBoys** · 03-02-2010, 11:36 AM

I wouldn't know. I file Canadian taxes.

Originally Posted by ncarr

Is the $250 what is deductible after subtracting 7.5% of your AGI? Because you can only deduct what cost you more than that.

From Publication 502 (2009), Medical and Dental Expenses :

How Much of the Expenses Can You Deduct?

You can deduct on Schedule A (Form 1040) only the amount of your medical and dental expenses that is more than 7.5% of your AGI(Form 1040, line 38).

In this publication, the term “7.5% limit” is used to refer to 7.5% of your AGI. The phrase “subject to the 7.5% limit” is also used. This phrase means that you must subtract 7.5% (.075) of your AGI from your medical expenses to figure your medical expense deduction.

Example.

Your AGI is $40,000, 7.5% of which is $3,000. You paid medical expenses of $2,500. You cannot deduct any of your medical expenses because they are not more than 7.5% of your AGI.

**MomToTwoBoys** · 03-02-2010, 11:57 AM

Originally Posted by Libby

I was just gonna say - go back to the doctors office/pharmacy and ask for a reprint...they will gladly do it for you and it does show 'reprint' across the top but its still from the official pharmacy.

Go back and try to get more for your refund gf!!

Sadly, I can't modify the return now.

I already sent it in via QuickTax. Ahhh well, now I know that for next year.

**monkeywrangler71** · 03-02-2010, 01:53 PM

Originally Posted by MomToTwoBoys

Sadly, I can't modify the return now.

I already sent it in via QuickTax. Ahhh well, now I know that for next year.

You can modify your return any time you want for the next six years. Fill out a T1 Adjustment request, or sign up for MyAccount and do it online.

**NikoSan999** · 03-02-2010, 03:13 PM

Congratulations regardless...more money for you...less for them. That's always a winner any way you cut it and yes, now you know for next year.

**ncarr** · 03-03-2010, 08:31 AM

Originally Posted by MomToTwoBoys

I wouldn't know. I file Canadian taxes.

WHoops! I should have checked your location first!

**JanieD** · 03-03-2010, 11:15 AM

Good reminder to keep receipts & even start a folder for tax deductions for our next return! Thank, MomToTwoBoys! Its not much fun trying to track down missing information when you're filling out tax forms or trying to get everything together to drop off at the tax preparer's office.

Ncarr, the IRS link is quite helpful. Looks like we are just under the 7.5% (which seems high IMO; not that it matters, but doesn't that seem like a lot?). We were hoping the medical bills would help offset taxes for 2009. We will double check with our tax person just in case, but I'm not counting on it.

**MomToTwoBoys** · 03-04-2010, 12:23 AM

Originally Posted by JanieD

Good reminder to keep receipts & even start a folder for tax deductions for our next return! Thank, MomToTwoBoys! Its not much fun trying to track down missing information when you're filling out tax forms or trying to get everything together to drop off at the tax preparer's office.

Ncarr, the IRS link is quite helpful. Looks like we are just under the 7.5% (which seems high IMO; not that it matters, but doesn't that seem like a lot?). We were hoping the medical bills would help offset taxes for 2009. We will double check with our tax person just in case, but I'm not counting on it.

Oh you should have seen me this year.

You'd have had a laugh on me... I was so bad. I checked every single drawer that I had, plus boxes, for receipts. It was frustrating. At least now they're all in one place.

I have a file folder thing that holds my coupons. I might put the receipts in there also.

**patticakes** · 03-04-2010, 07:47 PM

Originally Posted by Palooka

I can't remember the exact amount, but it has to be pretty high before we can use medical expenses for tax deductions. That's no surprise.

But good for you.

Last time I checked, it was at $15,000.

**mommy2010** · 03-07-2010, 11:01 PM

The best thing to do is start a file folder for anything you can use as deductions, I have one started and I put in all medical expenses I pay and anything I give to charity (make copies of checks or if paid in cash my church sends me a statement).

**DaughterOfErin** · 03-20-2010, 11:29 AM

Originally Posted by Palooka

I can't remember the exact amount, but it has to be pretty high before we can use medical expenses for tax deductions. That's no surprise.

But good for you.

Just got off the phone with my CPA. It's around amount over $7,500 that will be deductible. I didn't qualify, despite having to pay COBRA and Rx

Well I look on the bright side of it all, at least I don't owe my first born! Thanks to my mortgage interest I'll be getting at least $1,000 back (it's usually around $4,000) I really thought I was gonna take a huge hit, to add insult to the injury of being one of millions who lost their jobs last year and now owe on the unemployment money.

Unfortunately that won't be play money...I owe bills to others.