I paid for a presciption with a credit card in mid Dec. 2006 but didn't actually pay for it until after Jan. 1, 2007 - can I claim it for 06 taxes? This is the first year I've been able to itemize, usually we end up a few hundred under the standard deduction, we had more medical bills last year than normal. So odds are if I can't claim it for 2006 I won't be able to use it for 2007.
Thanks in advance!!
2007-03-19 20:04:29 · 11 answers · asked by Jeff S 6 in Business & Finance ➔ Taxes ➔ United States
You paid for the prescription in 2006.
When you paid the credit card bill is immaterial.
2007-03-19 20:09:37 · answer #1 · answered by greymatter 6 · 5⤊ 0⤋
You MAY make the deduction for 2006.
What you are doing when you pay with a credit card is you are borrowing the money from the credit card company, and then using the "loan" to pay for the goods and services. You paid in 2006 with these borrowed funds. Just because the credit card company doesn't ask you to repay them until 2007 does not change the date that you paid for the item to be deducted.
When you pay your credit card bill, you are not paying for the items you bought, you are paying back the loans they gave you for the items you bought.
Keep in mind that only the amount of total medical expenses that excede 7.5% of your adjused gross income are deductable. For instance: If 7.5% of your AGI equals $2,000 then the first two thousand dollars of medical expenses may not be deducted.
2007-03-19 20:27:11 · answer #2 · answered by Answer Girl 2 · 0⤊ 1⤋
An expense paid with a credit card is considered as paid when you put it on the card, not when the bill is actually paid off. So yes, it's a 2006 expense.
2007-03-20 02:42:30 · answer #3 · answered by Judy 7 · 1⤊ 0⤋
The prescription is considered paid for when you charged it to your credit card account. Since that was in 2006, take the deduction!
Actually, even if you NEVER paid the CC bill, you'd STILL get the deduction.
2007-03-19 22:32:29 · answer #4 · answered by Bostonian In MO 7 · 2⤊ 0⤋
Call the creditor and ask for a payment arrangement. If you have been good about making payments in the past they may work with you. Don't bother with the reason you gave in your question. Your lack of planning is not their problem. I've heard them all......just be up front. Say something like...."Due to some unforeseen circumstances I find myself short of funds. Since I have a good history with you, I would like to know if I could have an extension and pay my bill in full by the 22nd ." The first person you speak to may or may not have the authority to do this. Just keep escalating. Remain calm and professional. And when you get permission make sure you pay when promised!
2016-03-29 07:40:37 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Like others mentioned, you paid for it when you handed them your credit card & they processed it (in Dec 06). It doesn't matter that the credit card company didn't bill you until 2007.
2007-03-19 23:28:43 · answer #6 · answered by cinsmith1 3 · 1⤊ 0⤋
You can deduct the perscription for 2006. Remember that you have to have over 7.5% of your adjusted income to claim medical expenses. So If you made 30,000 you would have to have over 2250 for deducting your medical expenses. If you had a Flex spending account anything that paid off won't be able to deduct.
We had over 3,500 in medical expenses and still couldn't write it off.
2007-03-20 01:58:35 · answer #7 · answered by todd s 2 · 0⤊ 0⤋
If you use a credit card, include medical expenses you charge to your credit card in the year the charge is made, not when you actually pay the amount charged.
IRS Pub. 502, under "What Expenses Can You Include This Year?"
http://www.irs.gov/publications/p502/ar02.html
2007-03-19 20:23:28 · answer #8 · answered by tma 6 · 3⤊ 0⤋
The date you paid for the prescription at the pharmacy is what counts.
2007-03-19 20:12:16 · answer #9 · answered by redboomkat 3 · 0⤊ 0⤋
the receipt is dated 2006, so that's when you use it!
2007-03-19 20:12:22 · answer #10 · answered by Jim S 5 · 1⤊ 0⤋