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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? |
#2
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USA tax deductible medical expenses?
"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 |
#3
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USA tax deductible medical expenses?
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 |
#4
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USA tax deductible medical expenses?
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 |
#5
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USA tax deductible medical expenses?
"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 |
#6
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USA tax deductible medical expenses?
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 |
#7
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USA tax deductible medical expenses?
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 |
#8
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USA tax deductible medical expenses?
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! |
#9
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USA tax deductible medical expenses?
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? |
#10
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USA tax deductible medical expenses?
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 |
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