Hi, I have 2 questions.
I had surgery & paid $3000 with a hospital backed credit card. My question is can I deduct the full $3000 or can I only deduct how much I have paid back thus far? I feel like I should be able to deduct the whole amount as the hospital already got that whole amount.
2nd question, same surgery, I am making payments to my surgeon & anesthesiologist that weren’t covered by the credit card or insurance. Can I only deduct what I’ve paid thus far or the grand total I was charged?
You can enter the whole amount that was put on that credit card if you did that in 2020. For the surgeon, etc you can only enter what you paid out of pocket so far.
The medical expense deduction has to meet a rather large threshold before it can affect your return. The amount of medical (including dental, vision, etc.) expenses that will count toward itemization is the amount that is OVER 7.5% of your adjusted gross income. You should only enter the amount that you paid in 2020—do not include any amounts that were covered by insurance or that are still outstanding. Of course, your medical expenses plus your other itemized deductions still have to exceed your standard deduction before you will see a difference in your tax due or refund.
To enter your medical expenses go to Federal>Deductions and Credits>Medical>Medical Expense
You can deduct the full 3,000 you charged on the credit card.
If you put it on a credit card or took out a loan you can deduct the full amount even though you pay it over time. If you are on a payment plan with the hospital or doctor, etc. then it's only the amount you pay. Either way you only can deduct the principal amount, not any interest.