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r-dorr1952
New Member

Is there a medical expense deduction limit, if income is below the threshold limiting medical expense deductions. a point when another $ of expense doesn't lower tax

I enter in turbo tax $15,000 dental expense, tax owed drops $1,000.  Enter another $650 in lab expense category, there is no change in the tax amount TT computes as owed.  Would expect some decrease in tax owed unless there is 1) a medical deduction limit, or 2)TT is broke.
1 Best answer

Accepted Solutions
AndreaG
New Member

Is there a medical expense deduction limit, if income is below the threshold limiting medical expense deductions. a point when another $ of expense doesn't lower tax

It depends on your exact circumstances. You can only claim a deduction for the medical and dental expenses that you paid in 2016 that are in excess of 10% of your adjusted gross income OR in excess of 7.5% of your adjusted gross income if you were at least 65 years old as of the end of 2016.

You can view the total deductions that you have entered in to Turbo Tax to make sure that all of your medical expenses were included. However, this might also be an alternative minimum tax (AMT) issue. To determine if your medical expenses are being reduced because of AMT:

  • Delete the amount of the lab expense since there was no change after entering this amount. Then review your Form 1040. Write down the total itemized deduction amount on line 40, the tax liability on line 44, and the AMT on line 45. 
  • Then go back in to the itemized deductions section and put the lab expense amount back in.
  • Then review your tax return again. If you are affected by AMT, you will notice that your total itemized deductions increased by the amount of the lab expense. Then compare your tax liability to the AMT; the tax liability will decrease by the same amount that the AMT increases.

To review the entries on your Form 1040:

  • Log in to your Turbo Tax account
  • click on "take me to my return"
  • Click on "my account" tab at the very top of the screen
  • Click on "tools"
  • Click on "view tax summary"
  • Click on "preview my 1040". This is part of a narrow white bar at the very top of the screen
  • When your 1040 form appears, you will be able to scroll through and look at the individual line items.
  • Click the "back" button when you want to return to your main Turbo Tax screen. The back button is part of a narrow white bar at the very top of the screen.

View solution in original post

1 Reply
AndreaG
New Member

Is there a medical expense deduction limit, if income is below the threshold limiting medical expense deductions. a point when another $ of expense doesn't lower tax

It depends on your exact circumstances. You can only claim a deduction for the medical and dental expenses that you paid in 2016 that are in excess of 10% of your adjusted gross income OR in excess of 7.5% of your adjusted gross income if you were at least 65 years old as of the end of 2016.

You can view the total deductions that you have entered in to Turbo Tax to make sure that all of your medical expenses were included. However, this might also be an alternative minimum tax (AMT) issue. To determine if your medical expenses are being reduced because of AMT:

  • Delete the amount of the lab expense since there was no change after entering this amount. Then review your Form 1040. Write down the total itemized deduction amount on line 40, the tax liability on line 44, and the AMT on line 45. 
  • Then go back in to the itemized deductions section and put the lab expense amount back in.
  • Then review your tax return again. If you are affected by AMT, you will notice that your total itemized deductions increased by the amount of the lab expense. Then compare your tax liability to the AMT; the tax liability will decrease by the same amount that the AMT increases.

To review the entries on your Form 1040:

  • Log in to your Turbo Tax account
  • click on "take me to my return"
  • Click on "my account" tab at the very top of the screen
  • Click on "tools"
  • Click on "view tax summary"
  • Click on "preview my 1040". This is part of a narrow white bar at the very top of the screen
  • When your 1040 form appears, you will be able to scroll through and look at the individual line items.
  • Click the "back" button when you want to return to your main Turbo Tax screen. The back button is part of a narrow white bar at the very top of the screen.
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