Message Font: Serif | Sans-Serif
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next
Author: DeltaOne81 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 124965  
Subject: Re: Medical Expense Deduction W/Gift Partial Pay Date: 1/31/2007 11:45 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
However, as far as I know, we should be able to deduct the full 34k from our income.

It seems a little odd to me, but is this correct?

No, medical deductions are only deductible as far as they exceed 7.5% of your AGI. So if you have an AGI of $100K, then you can only really deduct $34K - $7.5K = $26.5K.

Also, you need to exceed the standard deduction, of course, if you don't do this already. But, say you had $0 in itemized deductions, and you're married filing jointly, then of that $26.5K above, you have a standard deduction of $10,700, so only $15,800 is really actually a benefit.

And, of course, this is only a deduction, so in the 25% tax bracket, you would actually save $15,800 * .25 = $3950.

Anyway, apply your own numbers to this, but I hope I've illustrated the concepts. You can get more information in IRS Publication 502:

And yes, the gift doesn't impact this.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.