Medical Deduction

[cgmartin]

In 2023 I incurred a $6,000 dental expense. The cost was covered by a financial institution associated with the dental office.  I will have monthly payments. As of October, 2023, I had only made one payment, but will make additional monthly payments the remainder of 2023. When I file my taxes for 2023, can I use the entire $6,000 as a medical expenditure, or only the amount of payments I made in 2023.  Thx.

[VolvoGirl · Accepted solution]

My notes say.......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.

Then you can only deduct the amount of unreimbursed Medical Expenses you actually paid over 7.5% of your AGI. And all your itemized deductions have to be more than the standard deduction to get any benefit (so you would only be getting the benefit of the amount that puts you over the standard deduction). And since the Standard Deduction is increased more people will not need to Itemize.

[DoninGA]

If the financial institution paid the entire amount of $6,000 to the dental office and you are making monthly payments to the financial institution then on your 2023 tax return you can enter the entire $6,000 as a medical expense itemized deduction on Schedule A.

[cgmartin]

Thank you for your prompt response.