Tax Question: Itemize Medical Bills

[NinaBella]

Since retiring from the military and for the first time ever, we have a very large amount of dental bills that exceeds 10% of our taxable income. So I have a question as what I am reading online isn't clear. For us to itemize our taxes, does the Wells Fargo Health Advantage card that the dental surgeon had my husband open need to be paid off? Right now we are in the zero interest time frame, but if the card needs to be paid off to claim the expenses on taxes, I can call my bank and ask for a loan and pay this card off in 2017. Since we have never done this, I don't want to wait to find out in April that we "could have" but missed a particular requirement like paying off a card in 2017.

Thanks in advance for any info.

 

[lanejudy]

I always claim medical expenses in the year it was incurred, even if my payment is made after January 1st. If the treatment or procedure is on-going and would be billed in separated amounts across the years, you'll want to spread it. Do you have a tax advisor? Definitely check in with that person early so you know what you'll need. Be aware that if you typically use the standard exemption, the higher-than-usual medical expenses may not bump you enough to make a difference; it will depend on how high the expense is coupled with your other itemized expenses. And I believe only the amount greater than 7% ofyour taxable income is deductible, so not the full expense.

Good luck!

 

[supersnoop]

Do you incur an expense when you charge it to your credit card or when you pay off the credit card? The vast majority of filers use a cash-based accounting system, which means you’d account for the expense when you paid it. Paying it with your credit card counts.

 

[Choirmom]

I'm an Enrolled Agent (tax professional enrolled to practice before the IRS). You can deduct medical expenses when you pay them. Paying with a credit card counts, so yes, you can deduct them. If you are 65 years of age or older, the deduction is limited to anything over 7.5% of your adjusted gross income. If you are under 65, then it is limited to anything over 10%.

Don't forget to deduct the cost of private medical insurance (not insurance through your employer), prescriptions, doctor, hospital, dental, vision, and hearing aids. Also, medical miles driven are deductible at .17 per mile.

 

[PatMcDuck]

I always list them, because there have been years that while we missed the federal level of expenses to get a deduction, we met the lower state standard.

It has been dental expenses lately that have been so high, thousands and thousands of $$, my husband's union pulled dental insurance 10 years ago, I sure miss it.

 

[NinaBella]

I'm an Enrolled Agent (tax professional enrolled to practice before the IRS). You can deduct medical expenses when you pay them. Paying with a credit card counts, so yes, you can deduct them. If you are 65 years of age or older, the deduction is limited to anything over 7.5% of your adjusted gross income. If you are under 65, then it is limited to anything over 10%.

Don't forget to deduct the cost of private medical insurance (not insurance through your employer), prescriptions, doctor, hospital, dental, vision, and hearing aids. Also, medical miles driven are deductible at .17 per mile.

We do not have a tax advisor, and we have never itemized anything on taxes. We live in FL so not state taxes. We use Tricare Prime which has different rules than private medical insurance. I am not even sure we can claim miles. I have been going to the VA hospital this year and am eligible to file travel vouchers. I filed about three vouchers but it the receptionist fails to mention it and print the form, I forget to ask, so of a dozen appointments, I filed like three times. I didn't think about vision for the kids. I need to see if we can claim our ortho. DH and I both had pay raises this year, so actually we might be a very small amount short of being able to meet the 10% mark (we are under 65). DH has to have one more dental procedure, so I told him to ask if we can go ahead and pay for that procedure and order the two implant teeth now so we can ensure we meet the 10%. The last procedure is putting in the actual implant teeth, he has already had all the surgeries and putting in the actual teeth are the only thing left.

 

[Choirmom]

We do not have a tax advisor, and we have never itemized anything on taxes. We live in FL so not state taxes. We use Tricare Prime which has different rules than private medical insurance. I am not even sure we can claim miles. I have been going to the VA hospital this year and am eligible to file travel vouchers. I filed about three vouchers but it the receptionist fails to mention it and print the form, I forget to ask, so of a dozen appointments, I filed like three times. I didn't think about vision for the kids. I need to see if we can claim our ortho. DH and I both had pay raises this year, so actually we might be a very small amount short of being able to meet the 10% mark (we are under 65). DH has to have one more dental procedure, so I told him to ask if we can go ahead and pay for that procedure and order the two implant teeth now so we can ensure we meet the 10%. The last procedure is putting in the actual implant teeth, he has already had all the surgeries and putting in the actual teeth are the only thing left.

If you normally don't itemize, and you may or may not "just" meet the 10% threshold, it may not be worth your time. The standard deduction for 2017 is $12,700 for married filing jointly. So deductible items such as property taxes, mortgage interest, sales tax, charitable contributions plus your medical expenses (those over the 10% threshold) would need to be over $12,700 for itemizing to be worth it.

You can deduct orthodontics. For the mileage deduction, you can deduct anything you don't get reimbursed for.

 

[NinaBella]

If you normally don't itemize, and you may or may not "just" meet the 10% threshold, it may not be worth your time. The standard deduction for 2017 is $12,700 for married filing jointly. So deductible items such as property taxes, mortgage interest, sales tax, charitable contributions plus your medical expenses (those over the 10% threshold) would need to be over $12,700 for itemizing to be worth it.

You can deduct orthodontics. For the mileage deduction, you can deduct anything you don't get reimbursed for.

We are over $12,700 our of pocket in the dental surgeries alone.

 

[supersnoop]

We are over $12,700 our of pocket in the dental surgeries alone.

That’s irrelevant. You can only write off the amount above the income threshold.

 

[Choirmom]

That’s irrelevant. You can only write off the amount above the income threshold.

This is correct. So if your Adjusted Gross Income is $70,000 (just throwing out a number), you would be able to deduct any medical expenses OVER $7,000 (10% of $70,000). In this situation, if you had $13,000 in medical expenses, you would be able to deduct $6,000.

 

[ktate82]

We are over $12,700 our of pocket in the dental surgeries alone.

So you will only get to deduct the amount over $10K. If you do your own taxes, use a good program that organizes everything for you. We use a free site online that goes through everything and automatically calculates it for us. If you use a tax professional, then they will be able to calculate how much of a deduction you get. As someone said before, you have to itemize in order to deduct it, but for some people, it's easy to do. Medical, dental, vision, mortgage interest, property taxes, and etc will add up quickly.

 

[Choirmom]

So you will only get to deduct the amount over $10K. If you do your own taxes, use a good program that organizes everything for you. We use a free site online that goes through everything and automatically calculates it for us. If you use a tax professional, then they will be able to calculate how much of a deduction you get. As someone said before, you have to itemize in order to deduct it, but for some people, it's easy to do. Medical, dental, vision, mortgage interest, property taxes, and etc will add up quickly.

This is incorrect, unless the OP's Adjusted Gross Income is $100,000 (10% of $100,000 is $10,000).

 

[NinaBella]

That's for everyone's help with this. I just finished filing and after gathering receipts for things I initially didn't think of (urgent care trips, eye exams, etc.) I ended up have over $20k in medical/dental/vision expenses. The only thing I didn't go and get the receipts for were prescriptions but most of our prescriptions are just a small co-pay. DH still has some procedures coming up and I was able to pre-pay our out-of-pocket costs after insurance. His surgeries were a killer and we got hit with a second set of fees. The original estimates given to DH (after we went back and checked) said PHASE ONE, he didn't realize there was a PHASE TWO. Also, this surgeon was the one that our family dentist works with and recommends, we also found out that although he takes our insurance he is not in-network. Or course we learned this after phase one. Being military for the majority of your life, these are things DH didn't think to ask before starting the procedures. He has anxiety at the dentist too, so at least he is comfortable with this surgeon. The surgeon is using his pics for his seminars because DH case is considered rare and severe? He had no bone all the way up to his nasal canal that the surgeon had to build some sort of titanium bridge for the implants.

We don't have regular medicines, so just $7 here or there for antibiotics or pain meds after an urgent care visit.

 

[TwoMisfits]

That's for everyone's help with this. I just finished filing and after gathering receipts for things I initially didn't think of (urgent care trips, eye exams, etc.) I ended up have over $20k in medical/dental/vision expenses. The only thing I didn't go and get the receipts for were prescriptions but most of our prescriptions are just a small co-pay. DH still has some procedures coming up and I was able to pre-pay our out-of-pocket costs after insurance. His surgeries were a killer and we got hit with a second set of fees. The original estimates given to DH (after we went back and checked) said PHASE ONE, he didn't realize there was a PHASE TWO. Also, this surgeon was the one that our family dentist works with and recommends, we also found out that although he takes our insurance he is not in-network. Or course we learned this after phase one. Being military for the majority of your life, these are things DH didn't think to ask before starting the procedures. He has anxiety at the dentist too, so at least he is comfortable with this surgeon. The surgeon is using his pics for his seminars because DH case is considered rare and severe? He had no bone all the way up to his nasal canal that the surgeon had to build some sort of titanium bridge for the implants.

We don't have regular medicines, so just $7 here or there for antibiotics or pain meds after an urgent care visit.

Any reason they didn't do a bridge...when my husband was a "bad" implant candidate after initial imaging tests (due to an abnormally large nasal cavity that would have caused post nasal drip issues), my dentist recommended a bridge - $2K OOP (after insurance) and done - he's very happy with it after a few months, and is happy he didn't go through the possible side effects and possible fail of the implant (since he was also a high "fail" candidate, as your spouse sounds like)...only bummer was crowning the 2 neighboring teeth, but one was small and one had a previously filled cavity, so it wasn't too much of a "ruining good teeth to fix the issue" thing...

I mean, it's too late now if he's through Phase 1 already...but if he has the issue on another tooth that has to be removed and replaced, it's a thought...

 

[NinaBella]

Any reason they didn't do a bridge...when my husband was a "bad" implant candidate after initial imaging tests (due to an abnormally large nasal cavity that would have caused post nasal drip issues), my dentist recommended a bridge - $2K OOP (after insurance) and done - he's very happy with it after a few months, and is happy he didn't go through the possible side effects and possible fail of the implant (since he was also a high "fail" candidate, as your spouse sounds like)...only bummer was crowning the 2 neighboring teeth, but one was small and one had a previously filled cavity, so it wasn't too much of a "ruining good teeth to fix the issue" thing...

I mean, it's too late now if he's through Phase 1 already...but if he has the issue on another tooth that has to be removed and replaced, it's a thought...

DH had the military do an implant for one tooth back in like 2004. That failed and it fell out which lead us to this procedure. He was warned the screw threads were showing and it needed to be redone along with the tooth next to it. Since DH is stubborn and doesn't like the dentist he wasn't proactive in getting it replaced. The implant tooth literally fell out one morning in our kitchen. He is having TWO implants now (one next to original).

ETA: DH says if he had realized the total out-of-pocket cost he would have just lived with a flipper for the rest of his life. He’s 57. But it’s his front tooth and the one right next to it. All of this was actually initially from what he calls a bad root canal done while he was in the military (before I met him). He wore a flipper when I met him. I am the one that found the military base dental clinic in Tampa would do an implant and encouraged that. Not all military dental facilities can do them.

Current surgeon guarantees the new implants will not fail because of the technology used.