 Income tax 2021-2022. Medical and dental expenses part number two. Get ready to get refunds to the max diving into income tax 2021-2022. Most of this information can be found on the Schedule A Instructions Tax Year 2021 on the IRS website at irs.gov irs.gov. Here we are in our income tax formula focused in on the itemized deduction keeping them distinct from the above the line deductions or the adjustments to income and noting that we would only be getting the benefit from the itemized deductions if after adding all of them up they're greater than the standard deduction. Here's the first page of the form 1040 focused on line number 12A where we have either the standard deduction or the itemized deduction. Standard deduction amounts on the left hand side helping us to determine whether it be worthwhile to picking up the itemized items because they would need to be greater than the standard deduction standard deduction being dependent in part on filing status. Here's the itemized deductions for the Schedule A we're focused in on the medical and dental expenses. Remember that as we think about medical and dental you got that added kind of restriction which is in essence a floor so generally you're talking about people that would benefit by itemizing who are more mainly more well off income levels higher oftentimes more likely than to be itemizing. However as their income goes higher they're also going to have problems with the floor here as to whether they're going to get the itemized deduction because then we have that floor of the 7.5% of the adjusted gross income so it's kind of like that mid-range or you got those two items that kind of restrict the itemized deductions for the medical and the dental. Here's a bigger look or more in-depth look at the standard deduction amounts on the left hand side as well as the standard deductions if there's other other conditions met age conditions as well as whether someone is blind so you can get an idea of the standard deduction and whether or not itemized would be beneficial. So these are examples of medical and dental payments you cannot deduct. So again you have some medical and dental with basically specifically put it in place and it's fairly straightforward whether it's going to be deductible or if it is deductible and then you've got some items where they're specifically going to say it's not deductible and then there's going to be a huge amount of gray area because again you can you can see the medical industry just these days where they're basically always claims everybody's got a new claim about the new medical thing that's the biggest medical thing and everybody should jump on that bandwagon and what not and it's a really costly thing oftentimes well then the question is well is that deductible you can imagine many different situations and doctors recommending different types of things and there could be gray area that you could do more research on from time to time or might have questions about so the cost of diet food so as we saw when they included something like obesity or when they include things that are behavioral related into into basically medical and dental you're talking about preventative things and when you add the category of preventative things then you would think that anything that basically anything you do that is you know healthy would give you would be a deduction and they can't do that and bring it all the way to food right you can't deduct your food even though you're not you're eating basically healthy food and it was doctor recommended and that kind of stuff so you could see why that would be an issue cosmetic surgery unless it was necessary to improve a deformality related to a congenital abnormality and injury from an accident or trauma or a disfiguring disease so we always have that kind of condition if you got surgery that's going to be involved is it going to be classified as cosmetic or not because that could have implications in this area for example with regards to the deductions life insurance or income protection policies the Medicare tax on your wages and tips or the Medicare tax paid as part of the self-employment tax or household employment tax so those are kind of like the payroll taxes basically that you're paying into kind of the Medicare part so you got the you got the Social Security and Medicare programs and you're paying in at that point in time to something that's more like a safety net type of program rather than medical kind of expenses for yourself at that point in time so if you were age 65 or older but not entitled to Social Security benefits you can deduct premiums you voluntarily paid for Medicare Part A coverage examples of medical and dental payments you can't deduct nursing care for a healthy baby but you may be able to take a credit for the amounts you paid you can see the instructions for form 2441 in that instance illegal operations or drugs so obviously is something that's outside the realm of legality then that's not something that's going to be deductible typically imported drugs not approved by the U.S. Food and Drug Administration the FDA so obviously you have a whole host of issues with drugs that are not the approved drugs you got you know you simulations of the drugs and so on and so forth this includes foreign made versions of U.S. approved drugs manufactured without FDA approval non-prescription medicines other than insulin including nicotine gum and certain nicotine patches so nicotine patches that this is another area where you can imagine when you're talking about behavioral items like me like I'm addicted to nicotine now they're saying nicotine addiction or addiction in general is a disease instead of kind of like a behavioral problem you can see that line is kind of kind of fuzzy so then you can have all kinds of things well I needed to do this to stop my behavior to stop my habits of things happening and all these other kind of stuff fall into that kind of that category which you could have limitations on travel your doctor told you to take for rest or a change so clearly when you think about kind of mental conditions and doctor care you can say a whole host of conditions of whether it be you know diabetes or any kind of condition heart disease stress it's all going to be affected by stress in some way and you can always get the doctor to say yeah you need to take some time off and go to the Hawaii or something like that and obviously the iris is going to be skeptical of people taking trips to Hawaii or something because the doctor said that was probably good for them even though it probably is good for them but whatever so funeral burial or cremation costs line one medical and dental expenses enter the total of your medical and dental expenses after you reduce these expenses by any payments received from insurance or other sources you can see reimbursements later so if you got reimbursed for it and you didn't actually pay it then you know it's not really a deduction it shouldn't be a deduction because you got repaid for it it's not really an expense out of your pocket at that point if advanced payments of the premium tax credit were made or you think you may be eligible to claim a premium tax credit fill out form eight nine six two before filling out schedule a line one you can see publication 502 for how to figure your medical and dental expenses deduction don't forget to include insurance premiums you pay for medical and dental care so those insurance premiums I can't be significant however if you claimed the self-employed health insurance deduction on schedule one so that's going to be this idea you can't double dip on the insurance line 17 reduce the premiums by the amount on line 17 in other words if you're self-employed and you got the the deduction of the insurance on the schedule one as part of your self employment you can't then take the deduction again on the schedule a that's what we call that would be like a double dipping of the deduction double dipping of the deduction triple D no can't do that who's met okay who's medical and dental expenses can you include so now you got your medical expenses for yourself fairly straightforward but what about family members and dependents and so on can you include their stuff so you can include medical and dental bills you paid in 2021 for anyone who was one of the following either when the services were provided or when you paid for them yourself and your spouse all dependents you claim on your return your child so these first two would clearly be the most you know straightforward you can say yeah everyone that's got a social security on the number on the tax return or some type of identification number on the tax return we felt out you would think that those would be the people that would be included and then we have your child whom you don't claim as a dependent so this is more the exception or gray area because they're not on your tax return social security number because of the rules for children of divorced or separated parents see child of divorced or separated parents in publication 502 for more informations whose medical and dental expenses can you include any person you could have claimed as a dependent on your return except that person received 4,300 or more or gross income or filed a joint return so this is another kind of exception to the rule the dependents would be included but if they weren't a dependent because of this one particular thing then you still might be able to include them any person you could have claimed as a dependent except that you or your spouse is filing jointly can be claimed as a dependent on someone else's 2,021 return again another kind of more unusual type of situation example you provided over half your mother's support but clan can't claim her as a dependent because she received wages of 4,300 in 2,021 so now you've got a situation that you're supporting your mother in the situation but you can't claim her as a dependent because she's over the income threshold of that 4,300 that's the one kind of exception area you can include online one any medical and dental expenses you paid in 2,021 for your mother in that instance insurance premiums for certain non-dependence you may have a medical or dental insurance policy that also covers an individual who isn't your dependent for example a non-dependent child under age 27 you can't deduct any premiums attributable to this individual unless he or she is a person described under whose medical and dental expenses can you include earlier however if you had family coverage when you added this individual to your policy and your premiums don't increase you can enter online one the full amount of your medical and dental insurance premiums you can see publication 502 for more information there so they're on you know the family coverage policy but they don't technically qualify so if the insurance didn't go up because of their being included under the policy then you might still be able to deduct the entire policy instead of trying to portion out the point that wasn't deductible and so on so if that applies to you and you got more questions on it take a look at publication 502 irs website irs dot gov irs dot gov reimbursements if your insurance company paid the provider directly for part of your expenses you paid only the amount that remained included online one only amount you paid so clearly if you got reimbursed the government's going to say we're not going to give you a deduction for the premiums to the medical insurance that you didn't actually pay because you got reimbursed if you received a reimbursement in 2021 for medical or dental expenses you paid in 2021 reduce your 2021 expenses by this amount if you received a reimbursement in 2021 for prior year medical or dental expenses don't reduce your 2021 expenses by this amount however if you deducted the expenses and the earlier year and the deduction reduces your tax you must include the reimbursement in income in schedule one form 1040 line eight Z so if you've got medical expenses and you got a reimbursement for the medical expenses in 2021 let's say you had a payment and then you got reimbursed for them well then you didn't actually pay them so you shouldn't get you're not going to get a deduction for the amount that you got reimbursed because you didn't really pay that amount then you've got this crossover situation like you paid it in 2021 for example or but then but then you got the reimbursement in 2022 or let's do it the other way you had the expense in tax year 2020 and then you got reimbursed in tax year 2021 well if you didn't get a benefit from the expense that you paid last year in 2020 then you don't have to do anything with the reimbursement in 2021 but if you did get a benefit it's kind of like the state taxes if if you recall the state tax situation with the refund on the state taxes if you did get a benefit from it in the prior year and then you got a kind of like a refund from it they reimbursed it in 2021 well we don't want to go back to 2020 the prior year and fix the return for the amount of the reimbursement in in order to fix it going forward we might have to include then that reimbursement amount in the year we we've received it as income to offset the fact that we got a deduction from it in the prior year so so that gets a little bit confusing if that that might be more of an unusual situation or it should be but if it comes up you can see publication 502 for details on how to figure the amount to include cafeteria plans you can't deduct amounts that have already been excluded from your income so don't include online one insurance premiums paid by an employer sponsored health insurance plan a cafeteria plan unless the premiums are included in box one of forms W two so typically if it's going through your employer you would think that they already basically took care of it by filling out the W two and not including whatever amount they don't have to include in box one of the W two so therefore you're only it's kind of like you got the deduction already but really what happened is your income line is going to be higher because box one of the W two is what's your income line will be with relation to federal income taxes also don't include any other medical and dental expenses paid by the plan unless the amount paid is included in box one of of your forms W two