Medical Expense Deduction - AGI issue

[dalejanik2]

7.5 % of my AGI is NOT the number shown when I fill out medical expense deductions.  In other words, if I divide the number shown (that I must exceed) by 7.5%, I calculate an AGI that is higher than the AGI posted.  Anyone else run into this problem?

[macuser_22]

Your AGI is on the 1040 form line 8b.    That will go on Schedule A line 2.   7.5% of that will be on Schedule A line 3.

What do you see that is different?

[LeonardS]

To calculate the amount of medical expenses that are not deductible take 7.5% of your AGI from Line 8b Form 1040. As an example if your AGI was $20,000 then 7.5% of $20,000 would be $1,500.  Only your medical expenses above $1,500 would be deductible.

[dalejanik2]

Yep, did that.  7.5% of AGI (line 8b) is giving me a different answer than what TT is telling me while in the medical expense deduction section.  Using the TT information, I back calculate an AGI that is ~$4,600 HIGHER than the AGI shown on line 8b. 

[macuser_22]

What exactally are you seeing?   Where in the deduction section do you see what?

[macuser_22]

You do not calculate AGI from the deduction.    You calculate the deduction form the AGI.

Take the 1040 line 8b and multiply that by .075.    Take that answer and subtract if from your total medical expenses which is what the deductions should be.  See Schedule A.

[dalejanik2]

I'm in the medical expense section of Deductions and Credits.  TT correctly matched my input expenses.  It then gives a number for allowable expenses above the 7.5% AGI limitations (and then correctly says that the standard deduction is better).  But, when you subtract that amount from the total expenses, it yields a value, which then divided by 7.5% is greater than taking 7.5% of the reported AGI on line 8b.

[macuser_22]

In the example above when I go the Deduction & Credits it tell me that $7,492 is less than the standard deduction.  When I subtract that from the $10,000 total expenses, I get $2,508.   2508 / .075 = 33440  a difference of $4 from the line 8b AGI of $33,444.

That is because the IRS requires that all fields be rounded to the nearest dollar.

7.5% of $33,444 is actually $2,508.30. so the deduction without rounding would be $10,000 - $2,508.30 = $7,491.70.

Backwards 10000 - 7491.70 = 2508.30   2508.30 / .075 = 33,444 the line 8b AGI.

That is what happens if you try to back calculate from rounded numbers.

[dalejanik2]

AGI line 8b = $68,893

7 1/2% = $5,167

Med Expenses = $8,308 (verified and accurate)

Allowable should be $8,308 - $5,167 = $3,141.

From TT:  "Your $2,797 medical expense deduction doesn't count yet because your refund already includes the best tax break, which is the $24,400 Standard Deduction."

The back calculated AGI should be (Expenses - Allowable) / 0.075 :  ($8,308 - $2,797)/0.075 = $5,510 / 0.075 = $73,467.

This shows that for some unknown reason, TT is including other income for the medical expense calculations, and that amount is different than the AGI that's reported on line 8b.  What am I missing?

[macuser_22]

---

@dalejanik2 wrote:

AGI line 8b = $68,893

7 1/2% = $5,167

Med Expenses = $8,308 (verified and accurate)

Allowable should be $8,308 - $5,167 = $3,141.

From TT:  "Your $2,797 medical expense deduction doesn't count yet because your refund already includes the best tax break, which is the $24,400 Standard Deduction."

The back calculated AGI should be (Expenses - Allowable) / 0.075 :  ($8,308 - $2,797)/0.075 = $5,510 / 0.075 = $73,467.

This shows that for some unknown reason, TT is including other income for the medical expense calculations, and that amount is different than the AGI that's reported on line 8b.  What am I missing?

---

It would appear that your expenses are $7,964 and not $8,308.  $344 is not accounted for if it says "your $2,797 deduction" and not your $3.141 deduction.

To find out how the $7,964 amount was arrived at you would have to print and view the Schedule A, line 1, Medical Expenses Worksheet (Medical Worksheet).