Let's begin at the beginning, shall we?
Way back in the days of my original Lap Band research, I discovered that the cost of the surgery is tax deductible. And because I'm not a tax law expert or a numbers person in general, I asked you smart Bloggie McBlogerton's about it. Lap Band Gal answered the call, and several subsequent questions about it, to the best of her knowledge, and I'm grateful for the help. But it had been several years since she went through the process and she couldn't quite remember all the details. (Totally understandable.)
What I knew was this: all out-of-pocket medical costs not related to your Health Savings Account could be itemized and deducted from your taxes. And the amount that can be deducted has to be more than 7.5% of your Adjusted Gross Income.
So by all accounts, The Hubs and I went into our tax prep appointment thinking we were in for a large chunk of a refund by the IRS. Pay up, sucka!
Not so much.
What we DIDN'T know was this: in order for you to be able to use your medical expenses as a deduction (and for it to actually HELP you, instead of hurting you), your medical expenses have to be in excess of the standard deductions that the government already gives you. For us, our standard deduction was $11,900, so in order for my surgery and medical expenses to help, it would have to be more than $11,900, and we would basically get back the difference.
All of my out-of-pocket medical expenses for the last year ended up being about $11,700. In my case, my surgery IS tax deductible, yes, but it is less than the standard deduction I already get, so it's useless.
To add insult to injury, we actually OWE the Federal Government this year. So I went from thinking we were going to get thousands of dollars back, to realizing that we owe hundreds of dollars, in a matter of minutes. Needless to say, I was not a happy camper.
What I knew was this: all out-of-pocket medical costs not related to your Health Savings Account could be itemized and deducted from your taxes. And the amount that can be deducted has to be more than 7.5% of your Adjusted Gross Income.
So by all accounts, The Hubs and I went into our tax prep appointment thinking we were in for a large chunk of a refund by the IRS. Pay up, sucka!
Not so much.
What we DIDN'T know was this: in order for you to be able to use your medical expenses as a deduction (and for it to actually HELP you, instead of hurting you), your medical expenses have to be in excess of the standard deductions that the government already gives you. For us, our standard deduction was $11,900, so in order for my surgery and medical expenses to help, it would have to be more than $11,900, and we would basically get back the difference.
All of my out-of-pocket medical expenses for the last year ended up being about $11,700. In my case, my surgery IS tax deductible, yes, but it is less than the standard deduction I already get, so it's useless.
To add insult to injury, we actually OWE the Federal Government this year. So I went from thinking we were going to get thousands of dollars back, to realizing that we owe hundreds of dollars, in a matter of minutes. Needless to say, I was not a happy camper.
I'm totally bummed out about this, but it being tax deductible was not one of the major selling points of my decision to get the band. I don't regret my decision one bit, I just wish I had done a little more research before getting my tax refund hopes up. So I thought I would post my drama and heartbreak here, so that any other self-pay bandsters might learn from my mistakes and have a little more information than I had.
The bottom line? Taxes suck.
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2 comments:
If you aren't doing the standard deduction, you can deduct other things including interest on your mortgage, donations you make, work-related expenses that aren't reimbursed, etc.
That in combination with the surgery costs may add up more to the standard deduction.
Although, I don't believe you can deduct all of the surgery costs. You can only deduct the cost that is above the 7.5 percent of your income.
I wasn't able to deduct my surgery costs, but I had insurance coverage and a flexible spending account, so I couldn't get over the 7.5 percent.
Booooo!!!!! Very sorry! It stinks to expect tax refund or bonus money, and then realize it isn't coming. :-(
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