Medical expenses/payment across years, how to handle

raky — Mon, 03 Jun 2019 20:13:41 GMT

Hope some one can guide here. Googling did not get me to the right answer yet. Had some medical expenses (special education) in 2105 which we did NOT deduct in 2015. These expenses were reimbursed in 2016 by school dist and they also issued 1099. So in 2016 taxes what form we fill up to indicate that this 1099 payment is reimbursement for expenses in 2015. Or just not mention it in taxes and explain if there is any question by IRS.

TIA, Raky

Since the reimbursement was reported on Form 1099-MISC an...

AnnetteB — Mon, 03 Jun 2019 20:13:42 GMT

Since the reimbursement was reported on Form 1099-MISC and the IRS has a copy of that form, they will expect to see it reported on your tax return. That does not mean that it should be included as taxable income though, especially if you have documentation to provide (if asked) that shows it was a reimbursement and not income to you.

Reporting this in TurboTax will be a two-step process, first to include the 1099-MISC as income and then to make a negative adjustment to remove it.

To include the 1099-MISC as a part of your tax return, follow these steps:

On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
This opens a box where you can type in “1099-MISC” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
The search results will give you an option to “Jump to 1099-MISC"
Click on the blue “Jump to 1099-MISC” link
Answer Yes you did receive a 1099-MISC
Fill in the details from your 1099-MISC then click Continue
Provide a short description for the reason you received the 1099-MISC then click Continue
On the next screen titled, “Does one of these uncommon situation apply?” choose the last option, None of these apply and then click Continue
On the next screen asking if the 1099 involved work like your main job, answer No and click Continue
On the next screen, check the box that you received the income in 2016 and then click Continue
Finally, choose “No, it didn’t involve an intent to earn money” and click Continue
Answer the questions on the next couple of screens to finish the process

Now the income shown on the Form 1099-MISC has been added to your return. Next, it will be “removed” from the return.

Follow these steps:

Go to Federal Taxes > Wages & Income and scroll to the bottom of the screen to the Less Common Income section (expand the section by clicking Show More if necessary)
Click Start or Update beside Miscellaneous Income, 1099-A, 1099-C
Scroll to the bottom of the list and click Start or Update beside Other Reportable income
Answer Yes to move forward
Enter a brief description, such as “reimbursement adjustment,” and the amount reported on the 1099-MISC as a negative number then click Continue
Click Done

When you see your Form 1040, the amount shown on the Form 1099-MISC will be reported twice on line 21 – once as a positive amount and once as a negative amount.

Use these steps to Preview your Form 1040 to check Line 21:

Click My Account at the top of your screen
Click Tools
On the Tools Center page, below “Other helpful links…”, click View Tax Summary
Click Preview My 1040 shown at the top of your screen
Use the Back choice at the top of the screen to return to your tax return

topic Medical expenses/payment across years, how to handle in Deductions & credits

Medical expenses/payment across years, how to handle

Since the reimbursement was reported on Form 1099-MISC an...