USA tax deductible medical expenses?

Happy New Year!

Well, a "high risk" pregnancy followed by major abdominal surgery and
some days in the NICU was expensive. We'll be itemizing tax deductions
this year. Should we consult a CPA or tax preparer? Or is this
something doable on our own? (We keep good records.) Can anyone
recommend a source of good information about what expenses are
deductible?

"Pologirl" wrote in message
oups.com...

Happy New Year!

Well, a "high risk" pregnancy followed by major abdominal surgery and
some days in the NICU was expensive. We'll be itemizing tax deductions
this year. Should we consult a CPA or tax preparer? Or is this
something doable on our own? (We keep good records.) Can anyone
recommend a source of good information about what expenses are
deductible?

My recommendation is to get tax software like TaxCut. Then do all the work.
When you're done with all the work, have it checked by an accountant.

This has three advantages:

1) You are likely to get all the information that the accountant will need.

2) You will understand the numbers better.

3) You won't use much of the accountant's time, so it should not cost too
much.

The other thing that you could do is get the stuff done early. With all
those deductions, to delay is to get *your* money back later. (The refund is
not something you get from the government; it is money of yours that is
owned by you held by the government.)

Jeff

On 1 Jan 2007 14:25:36 -0800, "Pologirl" wrote:


Happy New Year!

Well, a "high risk" pregnancy followed by major abdominal surgery and
some days in the NICU was expensive. We'll be itemizing tax deductions
this year. Should we consult a CPA or tax preparer? Or is this
something doable on our own? (We keep good records.) Can anyone
recommend a source of good information about what expenses are
deductible?

www.irs.gov

Nan

I think I'd go for an accountant, we've been advised that unless you have
entirely straightforward tax circumstances that they save you more than you
spend on them, I was suggested 100-200 dollars as a ball park figure for an
accountant.

Cheers

Anne

"Pologirl" wrote in
oups.com:


Happy New Year!

Well, a "high risk" pregnancy followed by major abdominal
surgery and some days in the NICU was expensive. We'll be
itemizing tax deductions this year. Should we consult a
CPA or tax preparer? Or is this something doable on our
own? (We keep good records.) Can anyone recommend a
source of good information about what expenses are
deductible?

go to a CPA. stay far FAR away from places like H&R Block,
especially if you have unusual deductions, like medical or
self-employed.
your allowable medical deductions are an amount over a
percentage of your income (& after subtracting any medical
benefits, if you have insurance) & it's slightly complicated.
my CPA explained it to me, but i wouldn't try to figure it on
my own. it also includes dental, so toss that in with the rest
of the medical
lee
--
Question with boldness even the existence of god; because if
there be
one, he must more approve the homage of reason than that of
blindfolded
fear. - Thomas Jefferson

Jeff wrote:
"Pologirl" wrote in message
oups.com...

Happy New Year!

Well, a "high risk" pregnancy followed by major abdominal surgery and
some days in the NICU was expensive. We'll be itemizing tax deductions
this year. Should we consult a CPA or tax preparer? Or is this
something doable on our own? (We keep good records.) Can anyone
recommend a source of good information about what expenses are
deductible?

My recommendation is to get tax software like TaxCut. Then do all the work.
When you're done with all the work, have it checked by an accountant.

This has three advantages:

1) You are likely to get all the information that the accountant will need.

2) You will understand the numbers better.

3) You won't use much of the accountant's time, so it should not cost too
much.

The other thing that you could do is get the stuff done early. With all
those deductions, to delay is to get *your* money back later. (The refund is
not something you get from the government; it is money of yours that is
owned by you held by the government.)

Jeff

I second Jeff's recommendation --before you start on the grand dig of
paperwork, though, use an on-line service to calculate your adjusted
gross income. You're limited to deducting medical expenses 7.5% of
your AGI -- in other words, big bummer that it is, if your AGI is
$125k, any expenses *over* $9,975 are deductible. (So if you had
$10,000 out-of-pocket expenses, you can deduct a whopping $625 dollars
-- $10,000 - $9,375. You can't just meet the threshold and deduct all
expenses...truly, it's ridiculous.)

I always use an on-line tax prep program, then will on some years
follow-up with an accountant; for the most part, we're pretty darn dull
re. taxes.

Caledonia

Pologirl wrote:
Happy New Year!

Well, a "high risk" pregnancy followed by major abdominal surgery and
some days in the NICU was expensive. We'll be itemizing tax deductions
this year. Should we consult a CPA or tax preparer? Or is this
something doable on our own? (We keep good records.) Can anyone
recommend a source of good information about what expenses are
deductible?


If things are going to be complicated, you might want to have a
professional prepare your taxes. I'd stay away from the chain-store
strip-mall places that pop up this time of year and find an established,
local professional. "Tax preparers" are often people who've only taken a
very limited amount of training or course work, as opposed to someone
who has studied for years to achieve a professional certification. If
you're looking at potentially significant money in deductions and a big
refund, the cost of a professional could be worth it.

I had a small home-based business for a number of years, and the first
couple of years I went to a CPA, who charged me about $150 to prepare my
taxes (all my receipts were organized and record keeping was on clear,
organized spread sheets - he didn't have to rifle through shoe boxes,
etc.That costs more!) After a couple of years, it seemed clear that
until I had some major change, my taxes would require the same forms
year after year and it was easy and straightforward to fill them out
myself. I would buy one of those thick tax books from the bookstore,
something like the Ernst and Young book for that year's taxes. It had
most, if not all, of the forms and explained pretty clearly all the
various deductions and forms, red flags, etc. I'm not sure how detailed
the current home tax prep software is, whether it helps you figure out
what you qualify for or if you just plug in the numbers.

I'm not an accountant, but my husband is well on his way to his CPA
license. I'm not plugging the professionals to get him work, but I do
know from the various courses he's taken just how experienced and
knowledgeable some people are and other people are not.

Karen

I have already searched the IRS website and read their Publication 502
on deducting medical expenses. It simply does not go into the details
that we need explained. Our situation is complicated by a lot of
travel and lodging, in addition to the more usual unreimbursed medical
expenses. And we are novices at itemizing; previously, we have simply
claimed the standard deduction, but this year in addition to deductible
medical expenses well in excess of 7.5% of AGI, we also have other
reasons to itemize.

We will do a first pass on our own using some tax preparation software,
then take our result to a CPA for review. So my task now is to find a
good CPA in my community.

Thanks all, for confirming my suspicion that consulting a tax preparer
probably is not sufficient. I sure don't intend to hand over boxes of
records!

dkhedmo wrote:
I'm not sure how detailed
the current home tax prep software is, whether it helps you figure out
what you qualify for or if you just plug in the numbers.

I'm not an accountant, but my husband is well on his way to his CPA

Karen, I have wondered about this too. I know TurboTax does help with
figuring out what information you should report, not just collect
numbers and do the math (that's the easy part). Is tax preparation
software putting CPAs out of business?

Pologirl wrote:
dkhedmo wrote:
I'm not sure how detailed
the current home tax prep software is, whether it helps you figure out
what you qualify for or if you just plug in the numbers.

I'm not an accountant, but my husband is well on his way to his CPA

Karen, I have wondered about this too. I know TurboTax does help with
figuring out what information you should report, not just collect
numbers and do the math (that's the easy part). Is tax preparation
software putting CPAs out of business?

I doubt it, though it has probably taken a bit of
a bite. Lots of people don't like using the software (though
I like it a lot) and some don't trust it. There are still
plenty of folks who prefer dealing with a human, though
frankly, I think the software is better than some of the
tax preparers! A good CPA will always be worth it for some
people who have complicated situations.

Best wishes,
Ericka