My medical expenses exceed 7.5% of my AGI. However when entered, my federal due amount did not change. Is there a reason it is not factoring in to my taxes?

[Ninaakahn]

About a week ago, I put in other items that are deductible and saw the dues go down. I was waiting to get my receipts in order before adding my medical expenses. When added, nothing changed. Do I not qualify?

[xmasbaby0]

Although the medical expenses exceed 7.5% of your AGI, did you also have enough other itemized deductions on Schedule A---like mortgage interest, property tax, charity donations.....??  to exceed your standard deduction?   If not, the medical expenses have no effect on your refund or tax due.

Your itemized deductions have to be more than your standard deduction before you will see a change in your tax owed or tax refund.  The deductions you enter do not necessarily count “dollar for dollar;” many of them are subject to meeting  tough thresholds—medical expenses, for example, must meet a threshold that is pretty hard to reach. (Only the amount that is MORE than 7.5% of your AGI counts)   The software program uses all the IRS rules that apply to the expenses you enter, and it tells you if you have enough to use your itemized deductions or if using the standard deduction is more advantageous for you.  Under the tax laws that have been in effect since 2018, some deductions have been capped—there is a $10,000 limit to the itemized deductions for state, local, property and sales taxes.

The standard deduction makes some of your income “tax free.”  It is not a refund.  You will see your standard or itemized deduction amount on line 12 of your 2024 Form 1040.

2024 STANDARD DEDUCTION AMOUNTS

SINGLE $14,600    (65 or older/legally blind + $1950)

MARRIED FILING SEPARATELY            $14,600    (65 or older/legally blind + $1550)

MARRIED FILING JOINTLY $29,200    (65 or older/legally blind + $1550)

HEAD OF HOUSEHOLD $21,900    (65 or older/legally blind + $1950)

[BillM223]

Do you have an HSA, and did you take distributions to pay for qualified medical expenses? If so, you need to know that TurboTax expects you to enter ALL medical expenses in Schedule A, even though reimbursed by insurance and your HSA.

TurboTax automatically subtracts the amount of your HSA distribution (the 1099-SA) from your entered medical expenses. This means that unless you have already entered HSA-reimbursed expenses, your total for medical expenses will be artificially low.

So taxpayers with an HSA who take distributions who do not list all HSA-covered expenses should enter a single miscellaneous expense, "HSA adjustment" and the dollar amount of the 1099-SA distribution. This will create a single medical expense that will offset the automatic subtraction by TurboTax of the HSA distribution. 

If this is your situation, then perhaps the medical expenses you add will make more of a difference.