I have a tax question If I provide insurance coverage to my 21 yr old child who is in college?

Question

If I provide insurance coverage to my 21 yr old child who is in college can I deduct medical expenses? There was an illness which I paid @ $20,000 in out of pocket expenses not covered.
She will file her own 1040 this year and is not considered anyone's dependent.

Answer 1

Unfortunately no, unless when she files she writes that she can be declared as someone else dependent then you cant.

My question would be since you provide support why cant you claim her? Is she is married I can understand that. Our 19y/o works yet we do claim her as we are able too.

I would advise you to speak to some tax experts with your daughter so that you both maximize your income tax returns. It really doesn't cost that much.

Answer 2

If she's not your dependent, you can't claim a deduction for the medical expenses you paid on her behalf.

HOWEVER, you very well may be able to claim her as a dependent and get a partial deduction for her medical expenses that you paid. Those expenses (plus any health insurance that you paid on her behalf) among others will determine if you provided more than half of her support for determining dependancy status. As long as she is not married, you can claim her if you provided more than half of her support.

If you do claim her, she will lose her personal exemption and will possibly have higher tax to pay herself. Normally this still works out better for the family as a whole since the parents' income is usually much higher than the child's is so the value of the exemption is greater for the parents as far as the tax liability is concerned.

Answer 3

You may claim the medical expenses if you meet the qualifications
Qualifying Child
A qualifying child is a child who:

Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild, niece, or nephew),

At the end of 2006 was:

Under age 19,

Under age 24 and a full-time student, or

Permanently and totally disabled,

Lived with you for more than half of 2006, and

Did not provide over half of his or her own support for 2006.

Dependent
You can include medical expenses you paid for your dependent. For you to include these expenses, the person must have been your dependent either at the time the medical services were provided or at the time you paid the expenses. A person generally qualifies as your dependent for purposes of the medical expense deduction if both of the following requirements are met.

The person was a qualifying child or a qualifying relative, and

The person was a U.S. citizen or national or a resident of the United States, Canada, or Mexico. If your qualifying child was adopted, see Exception for adopted child, next.

Qualifying Relative
A qualifying relative is a person:

Who is your:

Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild),

Brother, sister, or a son or daughter of either of them,

Father, mother, or an ancestor or sibling of either of them (for example, your grandmother, grandfather, aunt, or uncle),

Stepbrother, stepsister, stepfather, stepmother, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law, or

Any other person (other than your spouse) who lived with you all year as a member of your household if your relationship did not violate local law,

Who was not a qualifying child (see Qualifying child above) of any taxpayer for 2006, and

For whom you provided over half of the support in 2006. But see Children of divorced or separated parents, earlier, Support claimed under a multiple support agreement, next, and Kidnapped child in Publication 501.

To learn more read publication 501 http://www.irs.gov/publications/p502/ar02.html#d0e323
or call the Internal Revenue Service at 1-800-829-1040