Suppose through work you've reached your maximum out of pocket payment insurance maximum, say, $2000, for the year, at which point the insurance company pays any amount over the two grand.

Suppose you paid Doctor One $300 out-of-pocket during the year for your share not covered by insurance and Doctor Two $500 out of pocket during the year for your share not covered by insurance.

Are the $2000 plus $300 plus $500 all allowable medical deductions (subject, of course) to the 7.5% of AGI limit? It just doesn't seem right. That $2,000 seems like a large amount. Aren't the $300+$500 already included in the $2000?

So, in determining my medical expenses for 2022, I should ignore, in my example, the $2000, and use the $800? (There is actually a lot more than this.)

What if I just put the $2000 as my 2022 out-of-pocket medical expenses? Would this cause a problem for me if I am audited?

Thank you.

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"Patrick Cogan" wrote in message news:[email protected]...

Suppose through work you've reached your maximum out of pocket payment >insurance maximum, say, $2000, for the year, at which point the insurance >company pays any amount over the two grand.

Suppose you paid Doctor One $300 out-of-pocket during the year for your
share not covered by insurance and Doctor Two $500 out of pocket during the >year for your share not covered by insurance.

Are the $2000 plus $300 plus $500 all allowable medical deductions
(subject, of course) to the 7.5% of AGI limit? It just doesn't seem right. >That $2,000 seems like a large amount. Aren't the $300+$500 already
included in the $2000?

So, in determining my medical expenses for 2022, I should ignore, in my >example, the $2000, and use the $800? (There is actually a lot more than >this.)

What if I just put the $2000 as my 2022 out-of-pocket medical expenses?
Would this cause a problem for me if I am audited?

Thank you.

You add up any amounts you actually paid out-of-pocket for medical (normally via cash, check or credit card), subject to the 7.5% AGI limitation and less any payments the insurance company paid back to you. The rules of the insurance company governing what they cover and what they don't and what
their out of pocket max, etc. are totally irrelevant. The IRS only cares
about how much net money you actually paid out of pocket for medical
expenses. And don't forget to include the premiums you paid for that health insurance policy, and remember too to include dental and vision care
expenses.

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And don't forget to include the premiums you paid for that health
insurance policy,

But you can't claim premiums that were deducted pre-tax from
your pay. They are already excluded from your taxable
income.

Bob Sandler

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On Wed, 29 Mar 2023 15:44:18 EDT, Patrick Cogan wrote:

Suppose through work you've reached your maximum out of pocket payment insurance maximum, say, $2000, for the year, at which point the insurance company pays any amount over the two grand.

Suppose you paid Doctor One $300 out-of-pocket during the year for your share not covered by insurance and Doctor Two $500 out of pocket during the year for your share not covered by insurance.

Are the $2000 plus $300 plus $500 all allowable medical deductions (subject, of course) to the 7.5% of AGI limit?

You seem to be using "out-of-pocket" in two different ways. Possibly
you mean that the $500 and $300 were not allowable expenses as far as
your insurance is concerned, so they did not count as part of your
maximum out-of-pocket as computed by the insurance company?

But as Rick says, that doesn't matter. All the law cares about is how
much you paid for out of your own money, less any reimbursement from
the insurance company to you. Whether it's called copay, coinsurance,
or anything else doesn't matter, and it doesn't matter whether your
insurance considers it a covered medical expense. All that matters is
that you paid it, and that it's for an allowable item according to
the IRS.

Rick and Bob have already listed some types of medical expense, but I
think neither one mentioned mileage and medical equipment, which can
really add up. However, rather than our lists, all of which are
incomplete, why not get them from the horse's mouth:

<https://www.irs.gov/taxtopics/tc502>

And as Rick has already mentioned, after you list all your medical
expenses, you have to subtract 7.5% of your adjusted gross income.
But that will be pretty obvious as you fill out Schedule A, or if
you're using tax-prep software it will handle the 7.5% business for
you.


--
Stan Brown, Tehachapi, California, USA https://BrownMath.com/
Shikata ga nai...

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"Bob Sandler" wrote in message news:[email protected]...

And don't forget to include the premiums you paid for that health
insurance policy,

But you can't claim premiums that were deducted pre-tax from
your pay. They are already excluded from your taxable
income.

Bob Sandler

That's an excellent point. I'm forgetting that most people get health insurance through employment and most employers nowadays treat that as a pre-tax deduction.

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