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Chase Health Advance Pay

Posted in Uncategorized | August 27th, 2011

chase health advance pay
Do I deduct healthcare expenses the year financed or the year paid?

I’ve financed a lot of dental and orthodontic work. I used Care Credit for the dental, and Chase Health Advance for the orthodontic. I started making payments on them last year.

On my taxes, do I deduct it all in last year’s taxes because the dentist and orthodontist got their money already, or do I deduct only the amount that I’ve paid to the finance companies already?

Thanks in advance for informed answers.

The deduction should be made for the year it was paid to the health providers, not the year(s) you pay the credit companies. The IRS allows you to deduct only the amount that is in excess of 7.5% of your adjusted gross income, and you cannot deduct any of the finance charges charged by the finance companies.

Example: If your adjusted gross income for the year was $50,000, 7.5% of that is $3750. If your total out-of-pocket medical expenses for the year is $4000, you can claim a deduction of $250. If your total medical expenses are $3000, you can’t claim anything.

Remember that your medical expenses include all out of pockets expenses that were paid with after-tax dollars (prescriptions, co-pays, etc..). You cannot claim health insurance premiums or HSA contributions if paid through your employer, because they are paid with pretax dollars.