For more than one tax season TurboTax has told me that if my medical expenses exceeded a certain amount, I should put them in only to then tell me that the standard deduction is better. This year I entered my approximately $18,000 in medical expenses and then was told to take the standard deduction. I am not questioning this, but a bit of an explanation would be in order. A tweak of the algorithm would be nice so as to save a few steps.
So, what is the underlying calculation that determines whether I ought to put in my expenses or not bother?
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You can only used the medical expenses that are more than 7.5% of your AGI as a deduction towards your itemized deductions. This means if your AGI is $100,000 and your medical expenses are $18,000, you would have to deduct $7,500 from the medical expenses so you would only actually have $10,500 in medical expenses instead of $18,000. Then you overall itemized expenses would need to be more than your standard deduction for you to benefit from the medical expenses.
Other itemized expenses include mortgage interest, gambling losses up to winnings, charitable contributions, and state and local taxes up to $10,000.
The 2024 Standard Deductions are as follows:
Blind or over 65 and MFJ or MFS add $1,550
Single or HOH if blind or over 65 add $1,950
Standard versus Itemized Deduction
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