Schedule a line 3 shows 10% but calculates at 7.5% which is correct?

[jchmura]

What is the correct % for schedule A line 3?  The form shows 10% but calculates at 7.5%.  There is some confusion since the exception for those born after January, 1952 had expired on December 31, 2016, but.... will this be reinstated retroactively with the new 2018 tax law? Will the TurboTax discrepancy between the display and the actual calculation be corrected?

[SteamTrain · Accepted solution]

Well....the forms are not in their final form yet...and won't be until late January....so 10% "Was" the figure that was supposed to be used for 2017 for everyone in (7.5% was the 2016 rate for 65-year-olds).  Yes.....it hadn't been fully updated in the software yet.

BUT...the new tax law (IF ...IF enacted and IF passed/signed promptly next week) will revert to use 7.5% for everyone (last I saw it...even back-applied to 2017).  So the software's use of 7.5%....no matter that the label indicating 10%......is working just fine..at least temporarily..

Check back in mid-late January

[dmertz]

If you want to see the results with 10%, you can use Forms mode to override Schedule A line 3 and enter the value yourself.  Just remember to update the value each time line 1 changes and remember to remove the override once the line-3 calculation is final and correct.

[dmertz]

Here's another alternative.  Temporarily inflate your medical expenses to increase the line 1 amount by 1/3.  Mark the inflated entries as Estimated.  (If you used HSA distributions to cover some medical expenses, do not inflate the expenses that were paid from the HSA.)

[matador27]

Is is certain that the Medical Deduction Threshold for 2017 (for everyone) is 7.5% of AGI?

[macuser_22]

Yes.  7.5% for everyone for 2017 & 2018.

The tax law that affects the medical deduction was just signed into law.  The official IRS Schedule A is still the 2016 version.  Until the IRS publishes the 2017 version with the changes and then issues the 2017 e-fileing specifications for Schedule A to tax software companies (like TurboTax) the form cannot be finalized.   Everyone is waiting for the IRS.

[one_elmwood]

Have Congress and the IRS settled this percentage yet?  today is Jan 13th, 2018

[macuser_22]

Yes.  It is 7.5% for everyone until 2019.

[matador27]

thanks for the confirmation...