Deduction

[greenjaggernut]

I paid off a debt I owed (2008) for my deceased husband's medical expense's. There was a lien against my home.  Can I claim a right of payment deduction or in any other deduction for tax year 2021? 

[MinhT1]

If you paid off a debt for medical expenses for your deceased husband in 2921, you can claim the payment as medical expenses on your 2021 tax return.

For tax year 2021, Medical Expenses are subject to the 7.5% rule and you can only claim the excess over 7.5% of your Adjusted Gross Income.

Please note that Itemized Deductions will only "help" when they exceed your standard deduction.

For 2021, standard deductions are:

For a taxpayer under 65, not claimed as a dependent

• $12,550 for Single
• $25.100 for Married Filing Jointly, or Qualifying Widow(er) with dependent child
• $18,800 for Head of Ho0sehold
• $12,550 for Married Filing Separately
• If you are over 65 or blind, add $1,350 for each instance if married or add $1,700 each instance if single or head of household

You can enter Medical expenses by following these steps:

1. In TurboTax, open your tax return
2. Click on Federal in the left-hand column, then on Deductions & Credits on top of the screen
3. Scroll down to locate the section Medical and click on Show more
4. Click Start next to Medical Expenses.

[greenjaggernut]

Thank you. What is a right of payment used for? 

[KrisD15]

It means the ability to claim a credit for income you claimed on a previous tax year return, but had to pay that income back in a following year. 

"If you paid back income of $3,000 or more reported in a previous year, due to having been paid in error, you can deduct that amount in the current tax year. Also known as a "claim of right," it is a credit for taxes paid on wages not ultimately received from the previous year."

link

[sage12]

So if you are over 65 and are Head of Household, you deduct $20,500.  What about the dependent you have?  

Turbo Tax has a deduction chart on Page 4 which indicated that if you are Head of Household and 2 boxes are checked  in the section 'Standard Deduction' you would have a deduction of $22,200.

In the section 'Standard Deduction', one additional box is checked for the person filing who is over 65 years of age and another box is checked for the dependent child.  That is a total of 2 boxes checked.

So, since I have a box for myself (over 65) checked and one for dependent child, why didn't Turbo Tax apply 

$22,200 as my standard deduction on the income tax form in Turbo Tax.

Please let me know and/or how to change that amount.  Thank you.

[email address removed]

[PattiF]

There is no standard deduction for a dependent. The correct amount for your filing status and age is $20,500. The exemptions that were previously used on the tax return have been discontinued now that the standard deduction has been raised.

See more about this in IRS Publication 501.

This chart from the IRS illustrates your standard deduction: