Can I deduct health care payments I make on my taxes if I rent? I am a single parent with sole custody.?

Question

I wanted to use the FSA account at my work to put pre-tax pay into to pay orthodontics for my 15 yo son so that I don't have to pay taxes on that money. But if I cannot deduct it because I rent and don't have enough deductions can I still do that? I do file singe head of household. I only have one child. Does anyone know what that deduction amount is that I would need to reach if that is what I must do? Thank you for your help.

Answer 1

The FSA would take the money out pre-tax, so you wouldn't even have to itemize to get the benefits - the amount would already be deducted from your taxable incomeso there isn't any deduction to take - it's already done automatically for you. That's what being taken out pre-tax means.

Answer 2

The only health expenses you can use on your tax return is the out of pocket expenses. The use of FSA to pay for your son's dental work can not be used on your tax return. The FSA is a wonderful savings tool to deduct your health expenses before taxes are calculated on your tax return. So, those $$$ have already benefited you tax wise.

Yes, you can file head of household. Depending on your level of income, you may also qualify for Earned Income Tax credit.

Chances are you do not have enough itemized deductions for your return unless all of your Medical expenses in excess of 7.5% of your adjusted gross income, state and local withheld income taxes and charities are the most common deductions along with real estate taxes and home mortgage interest that you do not have.

The 2006 head of household standard deduction was $7550. I don't have available figure with me at home, but it should be slightly higher than that figure.

Take care and hope this helped.

Answer 3

From your information, you will not be itemizing your deductions. You can take advantage of a FSA for medical expenses. This will reduce your income by the amount you set aside for medical expenses. As you note, those expenses will then be tax-free.

Whether or not an FSA is to your advantage depends on your tax bracket. If your income is low enough to qualify for the Earned Income Credit, you should make sure that by taking the FSA to reduce your income, you are not at the same time reducing your refund.

Your Child Tax Credit and Additional Child Tax Credit are going to be affected by the FSA.

Make sure you understand whether the FSA increases or decreases your refund before you do it. If the FSA is going to decrease your refund, then it would be better to pay the medical expense without using the FSA.

Answer 4

If you use your FSA account to pay the ortho bill you can not also take the deduction on your taxes.

To be able to deduct medical expenses you have to be able to use the long form to file and also have over $3,000 in medical expenses for the year.