If I had medical deductions from payroll in are they tax deductable and how much is?

Question

I had to pay my own medical thru payroll deductions. How much can I claim on taxes as a deduction?

Will it be reimbursed by the government?

Answer 1

For your medical deductions, you need to find out whether they were taken from your paycheck pre-tax or not pre-tax. If taken pre-tax, the medical deductions are treated as if you never earned the money, and never paid the medical deductions, so they would not be deductible. If they are not taken pre-tax, then they would possibly be deductible, and need to be reported along with all your other deductible medical expenses on Schedule A - Itemized Deductions under medical and dental expense, and the total needs to exceed 7.5% of your AGI for the excess to be deductible. And of course, you need to be able to itemize to get the benefit. I have attached a link to deductible medical expenses.

Answer 2

If you had a plan where money was put into an account for you to draw from for your medical expenses, then it was almost surely taken out pre-tax - so you couldn't take a deduction for any of that, since there wasn't any tax on the money in the first place. You've already essentially gotten your deduction when it was first taken out of your paycheck before tax.

Answer 3

You can't claim anything on your tax return.

If the deductions are through a 125 plan, then they should already be removed from the wages reported on your W-2 at the end of the year.

For example. If your salary was $30,000, and you paid $2,000 into the health insurance premiums, your W-2 at the end of the year would show $28,000 of taxible income.

You don't need to do anything on your tax return to claim the credit, it will happen automatically from your W-2 amount.

(I'm assuming that you're in the USA)

Answer 4

There are two ways to pay for medical insurance (we are talking insurance, aren't we?) from your payroll. Pre-tax and post-tax. Talk to your payroll dept or study your paycheck.

The more popular pre-tax is much better for you since it has already saved you on paying federal, state, and FICA tax. However, since the tax savings has already occurred when you receive your paycheck, there is no additional savings when you do your 1040. You can't double dip.

The less favorable and less popular method is post-tax. Only a lazy employer would do this to their employees. However, if you find out that your insurance is being paid post-tax, you can write off the premiums (as well as any other out-of-pocket medical expenses) on your 1040 Schedule A at the top. Ask your employer to set up a Section 125 plan to pay for these pre-tax. Actually, it saves you and your employer money. How does it save your employer? The money put aside is not taxed for FICA, and since your employer pays 1/2 of your FICA tax, they save $7.65 for every $100 they put into your 125 plan.

Good luck!