Straight from the source

Here is a link that might be useful: Deductions for Health Care

Thank you lucille for the fast response.

They're tax deductible only insofar as they exceed 7.5% of your AGI.

A couple of years out of date, but the information might be useful to you.

Here is a link that might be useful: Medical deductions

Thank you duluthinbloomz4,I guess I don't have to worry about it because of the big deduction amount they give us. We don't itemize there's no way we have anywhere close to making us itemize. Haven't done that for many years thankfully. Happy tax season to all. :)

My accountant always want my health care papers and I file short form.

Keep in mind that some states will allow you a deduction for medical expenses even if you don't itemize on the federal return.

However you file - short form, long form, itemize or not - I still think only medical expenses that exceed 7.5% of your adjusted gross income can be deducted.

Taking the standard deduction often is the better deal.

If I'm wrong, I'll own it.

This post was edited by duluthinbloomz4 on Sun, Jan 18, 15 at 15:29

Actually, it's 7.5% for people over 65, 10% for people under 65.

Don't forget that there are other types of deductions that get itemized, most with no % floor. While medical insurance may not be enough to justify itemizing, throw in real estate tax, state income or sales tax, mortgage interest, and it all adds up.

Any decent software or tax professional will automatically compare standard versus itemized on the federal return. The real expertise happens when they factor in the state return. In addition those states that allow medical deductions regardless of whether you itemize on the federal, there are others that only allow the deduction if you take it on the federal. Thus there are times when you're better off itemizing even if it makes the federal results worse, because the state result can offset that.

The >7.5 of AGI limit mentioned for medical expense deduction is correct, but the form comment is off a bit.

You need to itemize deductions to claim medical expenses in your return. To do so, you need fo file Form 1040. You can't use Form 1040EZ (Easy) or 1040 A (Short form), they're only for when you claim the standard deduction and have only a few factors to consider in your tax calculation.

Whether you itemize or claim the standard deduction isn't a strategy - it's a calculation. Take whichever is greater.

Emma, if your accountant is asking for more information, maybe he's trying to do a "greater of" calculation. If the result is a short form, I assume that means the standard deduction exceeds your itemized expenses. That's typical for people who don't own their home or do so in a low cost area with low state income tax.

snidely using the standard deduction is typical for people who have paid off their homes and have little other debt. The last statement in your post is not true for many.

maifleur, did you misread my comment?

The last paragraph says, in essence:

If someone files a short form, that suggests either they don't own a home, or they do but they're living in a low cost and low income tax area.

I said nothing about mortgage balances, but that factors in too. But plenty of retired people have mortgages - I do.

For those living in places like coastal California or the urban East Coast and suburbs, property taxes at 1-2% on modest homes plus state income tax and other typical items can easily push many to or beyond the standard deduction. In Ohio or Idaho, not so much. That's what I was saying.

You mentioned that they did not own their own home/live in a low cost area. Many of the oldsters I know have nice homes but property taxes alone are not enough to push them over the standard deduction. With their homes paid off and no mortgage deduction seldom will they have enough deductions. If they planned correctly their taxes are simple.

I think you've misread or not read twice. Here's a hint - look for the word "or", in both comments. Or don't, I don't care.

People should plan their affairs to maximize their investment returns and income, not to tailor their position to file a certain tax form. Making any effort so that "taxes are simple" is a mistake, it's aiming for the wrong target.

Learning how money works - an interesting hobby ... that pays well.

Learning how taxes work - same game.

Or pay an accountant who knows all that stuff ... and will ask you enough questions to learn what all exemptions and credits for which you may qualify.

I've asked several professional (at least, they have signs at their place of business) tax preparers whether a number of their clients, after they've completed the tax return, ask them for suggestions as to how they might tweak or slightly alter their way of doing things in order to arrange to pay fewer/lower taxes in future - and all of them say that no one does.

Unbelievable!

ole joyful

There's a banal old saying, that a person who acts as his/her own lawyer in court or with a legal matter has a fool for a client. The same is true here. Anyone who has accumulated enough money to have investment options, or on the other score, has enough income and complications that taxes matter, needs to get advice from someone knowledgeable. Amateurs in any undertaking are amateurs. Someone who knows nothing about financial matters isn't going to self-educate enough to be anything other than dangerous to themselves.

Tax accountants who receive no questions have clients who are dummies. People whose accountants offer no suggestions are similarly dealing with dummies and probably would do better finding service providers who are more capable.

Back when I was doing tax prep professionally, I noticed a big difference in questions depending on location. In some areas, all people want to know is "How soon will I get my refund?" In others, people have plenty of good questions (Roth vs traditional, 529 contributions, etc.)

Many CPAs and other preparers work on a drop-off model, while the chains and some others work on an interview model. It strikes me that those working on the interview model are likely to get more questions than those who are strictly drop-off.

GaryFX, it's not just because of the work format used and it's not limited to return preparers. There are service providers who do their work mechanically and brainlessly, while others will handle the same situation thoughtfully.

Imagine seeing a doctor for a sore throat, and he doesn't mention that your blood pressure is excessively high because..... you didn't ask about it. Versus, the one who you see with the same complaint who says "By the way, have you had your flu shot yet this year? While I have your file out, let me check when you had your last tetanus booster. "

It's not hard to tell who's thinking and who's sleepwalking.

I live in Iowa and I found this info on the 2014 tax instructions so I guess as long as a person doesn't use it on the Schedule A which is the itemize deductions form than I can put them on line 18. I never itemize because mortgage has been paid off for several years and Iowa gives us a generous standard deduction amount so works out for us. Thanks for all the input.

LINE 18: Health Insurance Deduction. Enter 100% of the amount paid for health and dental insurance premiums. This includes all supplemental health insurance, such as Medicare B supplemental medical insurance and Medicare D voluntary prescription drug insurance program (not âÂÂMedicare tax withheldâ on your W-2), and long-term nursing home coverage. The deduction must be reduced by the amount of any premium reimbursement from Health Reimbursement Arrangements (HRAs). Schedule A may not contain any health insurance premiums which were used as a deduction on line 18.
Note: No deduction is available to any individual who paid health insurance premiums on a pretax basis. Health insurance premiums are typically deducted from wages on a pretax basis.

katy - Lest there be any confusion, those instructions are specifically for the Iowa return and the Iowa schedule A, not the federal Sch. A.

Gary,yes I live in Iowa but your post will be helpful to others who don't live in a state that does it. Hope that there are several states that do this for everyone who is eligible. I appreciate you taking the time to answer my post.

"Lest there be any confusion"

Good thought, Gary, but maybe expressed too late.