Surgery Is Tax Deductible?

[AliveAgain 283]

Someone told me that the private pay portion of my surgery (the part insurance did not cover) is tax deductible, for calendar year 2012. Has anyone else heard this and do you know how it's done?

My doctor also wrote me a prescription for a gym membership that he said should be deductible as well since it was prescribed.

???

[thinoneday 445]

yup, sure is. . i was self pay and used the whole amount $15,500.00 as a medical deduction. . .

[CamarilloCA 41]

I think most people can deduct medical expenses if all your medical expenses exceed a percentage of your income. The percentage is around 7% of your income, but I would have to look that up to be sure of the exact number. Anything after that percentage, you can take as an itemized deduction. Also, if you are self-employed, you can deduct medical expense as well for yourself, your spouse, and your dependents. I use Turbo Tax to help me figure out these deductions. It's pretty good at taking you step by step.

I don't think a gym membership would qualify as a medical expense even if your doctor did prescribe it, but I'm not a tax professional. HTH.

[Rootman 1,101]

The EXACT figure for taxes in the USA is 7.5% of your adjusted gross income. That is IF you have enough over all deductions to itemize.

One common misconception is that this is a tax REBATE, it's not. The amount you pay OUT OF POCKET over and above the 7.5% AIG is tax deductible - which means that you will not have to pay taxes on that extra amount, NOT that you can take that amount off your taxes owed. So as a goofy example, if 7.5% of your AIG is $5000 and it cost you $5001 out of pocket for the surgery then you would get to not have to pay taxes on the grand total of $1. Assuming you pay a tax rate of say, 15% then you would save all of 15 cents off your taxes.

Remember that ALL out of pocket medical expenses that are allowed by the IRS count toward the 7.5%. Prescriptions, chiropractic, travel to and from doctors visits /. procedures, etc. Count it all then figure out if it along with any other deductions you may have will put you in better shape than the standard deduction using the non itemized tax form. Then take whatever form gives you the best result and file it.

[IowaAndy 95]

Any money you spend in medical expenses out of your pocket that is not paid back to you from a Cafeteria Plan or money that is taken out of your paycheck before taxes is tax deductible. As for the gym membership it does not make any difference if it is prescribed by a doctor or not that is not deductible. I have a portion of the tax law on my computer somewhere that talks about both of these and if I can locate it I will send to you. I deducted all of my surgery costs, medications and travel expenses on last years taxes. It does make a big difference.

[Wheetsin 714]

What Rootman said is correct. The others are correct to various degrees.

You may deduct only the amount by which your total medical care expenses for the year exceed 7.5% of your adjusted gross income (AGI). This is only applicable if you itemize deductions.

Your AGI is all of your qualified income, minus your qualified deductions. To calculate your AGI total all money you made during the tax year. This includes W2 income, business incoe, alimony, unenmployment benefits, taxable SS benefits, taxable interest, etc. Then subtract qualified deductions which include things like alimony you paid to someone else, moving expenses, student loan interest, etc. That gives you your AGI.

Let's say your AGI is $50,000.

7.5% of $50,000 is $3750. The portion of your expenses minus the first $3750 is what you can deduct.

Your medical expenses were $10,000.

$10,000 - $3750 = $6250 <- the amount you can deduct

And THANK YOU Rootman, for differentiating between credit and deduction. So many people get confused by that.

In my math above, wehat the deduction means is that you would not pay taxes on $6250 of your income. It does not mean you get $6250 extra tax refund.

(I can't tell you how many people think that deducting their mortgage interest means they get back, dollar-for-dollar, what they paid in interest)

Recap:

Your income from all sources - your allowable deductions = AGI

AGI * .075 = deduction threshhold (amount which expenses must exceed before they can be deducted)

Medical expenses - deduction threshhold = allowable deduction

Phew. Now I'm gonna sit back and I hope I didn't fat finger something in there and throw everything off.

[Forensikchic 528]

I was able to deduct mine as well. I paid 14200 for the surgery. It allowed me to put that down plus all my insurances premiums for the year, prescription copays, dr. copays, etc. You put ALL your out of pocket medical expenses on there and turbotax will subtract the 7.5% from it and deduct the rest from your tax bill. It helped lower my tax bill so I got more back but of course no where near dollar for dollar. I have never deducted medical expenses because normally they wouldnt be over the 7.5 percent but this surgery put it way over that. Worked out great for us!

[AliveAgain 283]

Thanks everyone! If only it could be a credit and not a deduction, that would be awesome.

Normally we file jointly/married, but that could blow us out of the ball park of the 7.5%. Now if we file separately/married, that may work in our favor. My surgery, all the pre-op work, etc. cost me about $7000 out-of-pocket once insurance hit their portion. I'm sure there will be more medical expenses over the rest of the year. We'd like to use the $900 left on our FSA for this calendar year, but don't want to complicate next year's taxes with a small amount under 2011 FSA and the remainder being the write off in 2012 taxes. I guess I need to finally find an accountant!

Not sure why my doctor insisted the gym membership could be written off when (you're right) -- it's right there on the IRS website that it's not a deductable expense. Guess he's a better surgeon that finance guy