Unusal Medical Expense Question

[kjsommer67]

I have a medical expense question.  While vacationing in Eastern Europe in December my wife was hit by a taxi.  Her injuries were severe enough that I had to medically air flight her back to the United States.  The cost for this was over 200000 which I paid up front.  I know this is tax deductible as a medical expense.  I am currently trying to recoup some or all of this cost from both my medical insurance and travel insurance.  However, I probably won't have a decision before the filing deadline.  My question is, If I claim the entire 200000+ as a medical expense and the insurance companies pay some or all of the cost after the filing deadline do I simply submit an amended tax return at that point and pay the taxes on the deduction that I originally claimed?  My wife is doing much better and is on her way to a full recovery.  

[CatinaT1]

No. According to IRS Pub 502, if you are reimbursed in a later year for medical expenses you deducted in an earlier year, you must generally report the reimbursement as income up to the amount you previously deducted as medical expenses.

However, don't report as income the amount of reimbursement you received up to the amount of your medical deductions that didn't reduce your tax for the earlier year.

For more information about the recovery of an amount that you claimed as an itemized deduction in an earlier year, see Recoveries in Pub. 525, Taxable and Nontaxable Income.

I'm glad your wife is doing better.