Hello, came across this discussion regarding LTC reimbursement. I'm helping a relative who received Form 1099-LTC which reports approx $25K in box 1. In box 3, only 'reimbursed amount' is checked (not per diem). Box 4, qualified contract, is also checked. She will be itemizing deductions for 2024.
When itemizing medical expense deductions, TT asks for the amount spent on prescriptions, medical professionals, facility fees, labs, travel, etc. One of the last questions (at least in desktop version) is "Tell us about any medical reimbursements . . . if your insurance company paid you back for any expenses . . . ".
First question - what is the proper way to account for the $25K reported on 1099-LTC? Should she:
(a) reduce the amount of facility fees reported (e.g. if spent $100K, only report $75K), or
(b) report the $25K in that last question, as described above? (or does it not matter either way?)
Second question - since Form 1099-LTC was received, it appears that it needs to be entered into the specific LTC category under the Miscellaneous Income section. By doing so, TT generates Form 8853, which I assume is included in the filing. It appears that the purpose of this form is to determine if any of the $25K is taxable, which it is not in her case (costs exceed reimbursements). So it appears that when receiving Form 1099-LTC, two actions are needed: (1) report it in the appropriate LTC section in TT in order to generate Form 8853, and (2) if itemizing, reduce the medical expense amount by the amount reported on Form 1099-LTC. Is this correct? Thanks in advance for any insight.
@Timoshenko
@AmyC
@DavidD66
