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Cat L | How can I deduct medical expenses from my taxes? |
I only made $3,600 dollars last year. I have $1,200 in medical bills (no insurance). So, is there some way I can get this money reimbursed? I had someone tell me to take the standard deduction (5,450), not to itemize. But, I don't get how the standard deduction works if I didn't even make 5,450. I feel like I am being punished for being poor and unable to work (due to medical problems).
Additional Details
Punished because due to my medical injuries, my income was limited, plus could not afford health insurance. If I had made 30,000 instead of 3,600, and had 12,000 in medical expenses, apparently I could write all but 7.5% of my medical expenses off my taxes.
So not only could I work very little and lightly, so that I made so much money. But I also had bills I had to charge in order to get treatment. Apparently if I was richer, I could get more govt. assistant. Doesn't really seem fair.
So, I will only get back what maybe 100 bucks, plus another 277 from EIT credit? Not even 400 dollars to cover 1,200 in medical bills? |
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PepsiLime
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sorry, but your standard deduction will take care of your $3,600 in income. You would only itemize (Schedule A) if your itemized deductions (medical expenses that exceeds 7.5% of your AGI, real estate taxes, state income taxes, personal property taxes, mortgage interest, charitable contributions (cash and non-cash) and miscellaneous deductions (that exceed 2% of your AGI). In your case, it's just easier to take the standard deduction. With the little that you earned, you might be able to get the Earned Income Credit, but there are certain qualifications that you need to meet for it. |
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Nut Cracker
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I don't even think you qualify to fill a tax return this year with gross income of 3600!
you have to make about $5000 or above for a single unless you are dependant, or you recieving some other kind of income or welfare!
The standard deducation is for every one that have a deducation less then $5000 to claim (whether u made it or not), they usually take the standard deducation, but if you have a deducation of more then 5000 then you claim you list your deduction. |
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Judy1
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You won't owe any tax in any case. A deduction only means that much of your income isn't taxed, it doesn't give full reimbursement to anyone. You'll be taking part of the standard deduction, to wipe out any taxable income. Since your taxable income would go to zero if you did file, you aren't even required to file at all. But there is one thing in the tax system that might give you some help. You don't say how old you are. If you are between age 25 and 65, and the $3600 you made was from working at a job, you'd be eligible for $277 for an earned income credit - to get that, you would have to file a tax return even though you didn't make enough to be required to.
Not to be unsympathetic, because I'm not, but how do you feel the tax system is punishing you? You aren't paying ANY tax - and might even get $277 of free money. The purpose of the tax system isn't to reimburse medical bills.
Edit: just saw your additional info. You might be misunderstanding what "write off your taxes means" in your example of someone with much higher income, and much higher medical bills. It means that much of the person's income wouldn't be taxed, not that they'd save that much in tax. This mythical person would still pay over $2000 in income tax on top of the $12,000 in medical bills he or she had to pay. |
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stephenweinstein
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1. The tax deduction is not supposed to "cover" the medical bills. It is only supposed to relieve you from having to pay income tax on the money that you spent on the medical bills. If you only made $3,600, you probably did not have to pay any income tax, so there is no tax to reduce.
2. If you only made $3600, you might qualify for other forms of government assistance with your medical bills, such as "healthy families" or medicare (free or nearly free health insurance that you would be able to afford), just not for government assistance with your tax bill - because there is no tax bill with which to assist you.
3. The 7.5% rule is that 7.5% of INCOME, not of the medical bills, is subtracted. For example, if you made $150,000 and had $12,000 in medical expenses, then $11,250 (7.5% of $150,000) could not be deducted and only $750 could be, which would result in a tax savings of much less than $400. |
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v b
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You will get no benefit from your expenses. Bummer.
Deductions can only reduce your tax bill to zero, not below it. |
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AB
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You will get the standard deduction even if you don't make that much as long as you aren't considered a dependent on anyone's return. You will end up getting all the taxes that were withheld back if you only made $3,600. |
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HRBlock Shannon C
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From what I see above, I would agree that the standard deduction is best for your federal or IRS tax return. Depending on what state you live in, you might be able to use your medical bills on that state tax return.
The standard deduction is a set amount the IRS says will reduce your taxable income, and it is based on your filing status. Itemized deductions are generally used if you have expenses that total more than the standard deduction.
Think of it like this: Every year the IRS says your standard deduction is $XX ( this much money ). Which means if you earn anything over the standard deduction you may have to pay taxes on it. If you make less than the standard deduction, you likely will not have to pay taxes on your income.
And then, the IRS says you get another $XX amount of money subtracted off your taxable income, if you claim yourself. (There are a lot of rules in here as to if you can claim yourself, depending on your age and personal situation.)
Here is a rough idea of how this would look for you, based solely on what is written above:
$3,600 income
- $1,200 medical bills paid in 2008 (Itemized)
- $3,500 personal exemption
= $0 taxable income (cannot go below $0)
$3,600 income
- $5,450 standard deduction
- $3,500 personal exemption
= $0 taxable income (cannot go below $0)
So with this information, if you itemize it would be creating an additional tax form and work.
Shannon Coley - H&R Block - Senior Tax Advisor 5
** This advice was prepared based on my understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. |
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J A
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Being punished? You will not pay any taxes, so how are being punished?
You will not be paying any taxes because you did not make enough, so there is no need for the deduction.
Only people who pay taxes receive the advantage of deductions. |
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hahunter88
|
Do not worry! Obama is going to give free universal health to all, sorry to hear about your income, you be eligible for an enormous refund, but for now, just wait and see. (By the way) for those making over that amount will get hit with more taxes...............just look at Yahoo news about Obama says we have to be patient, willing to give more....... |
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