Deducting medical bills in your taxes question

[SusanBAnthony]

If you have a medical procedure in December, and either don't get the bill until January, or get the bill but don't pay it until January, what years taxes does the medical expense count for?

Just a hypothetical question DH and I were pondering and my google skills apparently suck.

Another question about HSA's: if you save up a ton and nev need to use it, can you eventually take the money out for other purposes (when you are old)? If so what is the tax situation for the money you pull out? Is it just counted as income for the year you withdrew it?

[jenjen]

You could potentially deduct the expenses in the year they are PAID (not the year of service.). Also if you charge them on a cc, that counts as the day paid - not when you pay off your cc.

www.irs.gov/publications/p502/ar02.html#en_US_publink1000178852

See what expenses can you include this year.

[SusanBAnthony]

Lolololol at it being hard to meet the 7.5% threshold. Not for us it isn't! DH had open heart surgery last year, DS has special needs, and I may have a gene for colon cancer. We hit our 8000$ OOP max every year pretty much, plus the costs of premiums, plus the stuff for DS that is considered a medical cost but not covered under our insurance.

[jenjen]

I didn't answer your other question about an HSA: you will be taxed on the withdraw (because contributions are pretax) and also hit with a 10% penalty. A lot of older people use this to pay for medical expenses and premiums once they retire.

You won't be able to deduct insurance premium amounts unless they are paid with post tax money. Sorry your family always has such high medical expenses. Also, you can add mileage to/from dr appts, etc.

[rubytue]

Jan 6, 2013 22:46:42 GMT -5 kooshball said:

Jan 6, 2013 22:31:20 GMT -5 SusanBAnthony said:

Lolololol at it being hard to meet the 7.5% threshold. Not for us it isn't! DH had open heart surgery last year, DS has special needs, and I may have a gene for colon cancer. We hit our 8000$ OOP max every year pretty much, plus the costs of premiums, plus the stuff for DS that is considered a medical cost but not covered under our insurance.

Kind of hard = open heart surgery. I am broken beyond belief but still don't come close.

Yeah, a major surgery and a special needs child means you spend a lot. But I quit trying after I saved everything when I had 6 months of chemo and still didn't qualify. Probably says more about my insurance though.

[Deleted]

SBA-

Do you have an HSA? is that what you used to pay your OOP expenses? If so it isn't deductible because money that goes into the HSA is like money going into a 401k it doesn't have taxes witheld on it.

As for the HSA, I would presume most people will use up their HSA before death because living in a nursing home is expensive. IF you don't used up your HSA someone could inherit it and it has similar rules to an inherited 401k. (can be used for health care, distributions for non-healthcare subject to income tax in addition to estate tax).

You could get to the 7.5% threshold if your ins. company doesn't cover your son's therapy. It is actually the most common way to reach it.

[SusanBAnthony]

Well, they didn't cover his 3000$ evaluation this year, Septimus, and we are planning to do private speech therapy in 2913, so several hundred a month for that. We do have an hsa, and could use it for the 2012 bills, but in 2012 we paid 6k in post-tax premiums (cobra) before our move, plus the 8k oop max, plus the 3k eval, so we think we will just deduct on our taxes this year and save the hsa money for the future.

I am not worried about us using up the hsa money, we will! I wish that was a problem we had. I was just curious.

It feels like we should have so much more money than we do given our income, but then I realize we spent 20% on retirement, 20% on medical costs, so the remaining 60% is pretty modest.

[Deleted]

Jan 7, 2013 7:29:18 GMT -5 SusanBAnthony said:

Well, they didn't cover his 3000$ evaluation this year, Septimus, and we are planning to do private speech therapy in 2913, so several hundred a month for that. We do have an hsa, and could use it for the 2012 bills, but in 2012 we paid 6k in post-tax premiums (cobra) before our move, plus the 8k oop max, plus the 3k eval, so we think we will just deduct on our taxes this year and save the hsa money for the future.

I am not worried about us using up the hsa money, we will! I wish that was a problem we had. I was just curious.

It feels like we should have so much more money than we do given our income, but then I realize we spent 20% on retirement, 20% on medical costs, so the remaining 60% is pretty modest.

I feel for you we have a high deductible plan and it has been a life saver for the most part. We still paid OOP for some therapy but most of our medical/drug expenses were capped at $8k. DS's social therapy is $500 every 8 weeks and I want to add some OT in addition to what he gets at schools. Apparently our new insurance will cover 9 sessions which is better than nothing.

[Deleted]

Sorry you have so many medical expenses. I think this is the first year we won't be able to claim medical expenses on our taxes, but that's only because we had an HSA in 2012 and used pre tax money to pay the bills. I hate medical bills.