Question about medical deductions.?

Question

I am confused about how to count off medical expenses- I was in the hospital in August 2006 and haven't received a final bill. Do you deduct your costs (I know 7.5% of income) for the year charges were made or the year(s) you pay the charges off?

Answer 1

Only in the year paid.

Answer 2

For most things regarding individual taxes it's based on what you paid and were paid during the calendar year, no when the cost was incurred. So you can only deduct the payments you made during 2006. Which sucks because of the 7.5% rule.

Yep, I checked and the first line of the info below says: "You can include only the medical and dental expenses you paid this year, regardless of when the services were provided."

Answer 3

You reference the expenses paid during the year, regardless of when the services were provided.

So if you haven't paid the bill yet, you'll use them for your 2007 return.

And just to clarify the 7.5% rule: You may deduct only the amount by which your total medical care expenses for the year exceed 7.5% of your adjusted gross income.

Answer 4

I just went through the same situation. You can only claim what you've already paid for. I had a surgery in 2005 but paid for it in 2006, so that kind of worked out to my benefit. Good luck.

Answer 5

The general rule is that as an individual, you are on cash basis. Therefore, you only recognize income when you receive it, and you recognize deductions when you pay it.

Answer 6

Year paid