Medical expenses tax deduction?

Question

Do I claim the actual out of pocket expenses or the actual debt accrued? We have medical expenses from last year that we are currently making payments to the hospital on. Does anyone know what total I put for medical expenses? Would it be the amount paid so far or the total amount for the services?

Answer 1

You can only deduct what you actually paid on the hospital bills, during the tax year.

Publication 502
http://www.irs.gov/publications/p502/index.html

Answer 2

If you took out a loan to pay the expenses, claim the deduction when the loan was taken out. A formal time payment plan with the hospital would qualify as a loan and you could deduct the expenses when they were added to the payment plan.

If you are simply paying as you can without a formal agreement with the hospital, you can only claim the actual amounts paid. If the hostpital is charging interest on the outstanding balance, you probaby do have a credit arrangement with them and can deduct the expenses when they were added to the account balance.

In most hostpital admissions you would have signed an agreement to pay interest charges on unpaid balances after a certain period of time -- usually 30 to 60 days -- and that qualifies it as a loan for deduction purposes so you can deduct the charges as they're added to your outstanding balance due.

Answer 3

You can deduct the amount that is over 7.5% of your income. It is an itemized deduction. You need more itemized deductions to be more than the standard deduction to make it worthwhile. Most times you cannot itemize unless you have a mortgage.

Answer 4

The amount allowed as an itemized deduction is the amount actually PAID (not incurred), minus 7.5% of your income.

If a bill is paid using a credit card, it's considered to be paid when you put it on the card, not when you actually paid off the credit card bill.

Answer 5

deduct how much you have paid on hospital bills
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