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02-15-2008, 06:54 PM
 Tax Guru Join Date: Jan 2007 Location: New Jersey, USA Posts: 2,405 Blog Entries: 3
How much of "Medical Expenses" can a Taxpayer deduct on their Tax Returns?

According to the IRS code sections 216 (a), a taxpayer may deduct only the amount of their medical and dental expenses that is more than 7.5% of their adjusted gross income, that is the amount reported on Form 1040, line 38.

This means that a taxpayer must first subtract 7.5% (.075) of their adjusted gross income (AGI) from their total medical expenses to figure the allowable medical expense deduction that is reported on Schedule A.

The following example will help explain this AGI limitation in detail.

Lets suppose on Susan Jones 2007 tax return her adjusted gross income was \$75,000, and lets assume she incurred a total of \$10,000 in medical expenses in 2007. How much of her actual medical expenses would be deductible on her 2007 tax return?

Well, she can only deduct the amount that exceeds her AGI limit of 7.5%.

Her Medical AGI limit is 7.5% x AGI = \$75,000 x 7.5% = \$5,625. She cannot deduct the first \$5,625 or 7.5% of her adjusted gross income and only the excess amount is deductible.

So, the excess amount is \$10,000 - \$5,625 = \$4,375. Our taxpayer, Susan Jones can only deduct \$4,375 on her Schedule A of her 2007 tax return

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02-25-2008, 11:05 PM
 Junior Member Join Date: Jan 2008 Posts: 2
What if she paid no taxes? Could she still get a refund of her health care payments?

02-28-2008, 12:41 AM
 Tax Guru Join Date: Jan 2007 Location: New Jersey, USA Posts: 2,405 Blog Entries: 3
Unfortunately, at the present time the tax code will not permit a refund of her health care payments if no there are no taxes paid or if there are no taxable income to offset these expenses.

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