WWTBAM Bored

I have two tax questions. Both are probably kind of dumb, but I really just have no idea.

First, I won't be working at all in 2008 but will have a meager income from profit sharing and accumulated vacation pay and sick pay, as well as some NJ disability pay for the time that I'm not allowed to work due to the bun in the oven. Can The Naughty Norwegian claim me as a dependent next tax season? Chances are we will marry sometime during the year, but no date set as of yet.

Secondly, I seem to remember hearing that you can claim some medical expenses as a deduction if they add up to a certain percentage of your income. In 2008, what I will pay in insurance premiums and co-pays will almost definitely be greater than my total income for the year (it switches to COBRA after the kiddo is born). Will I be able to claim all of that as a deduction? How does that work?

You can itemize your medical expenses if they are above 7.5% of your income.

Say you made $10,000 and you had $1,000 worth of expenses, you would be able to write off $250 of the expenses. Of you had $3,000 worth of expense, you could write off $2,250.

Since you are single, you automatically get $5,350 as your standard deduction, so you might get more from taking the standard deduction.

I dunno, since I've never filled out a tax form myself. I do file taxes, I just don't fill out the form. I keep up with everything the accountant tells me he needs, fill out the form he gives me and then bundle it all up and send it to him. I will admit I am completely ignorant on what is or isn't deductible, I just do as I'm told.

Anyway, my question is about insurance premiums counting as medical expenses. Guess I just always figured they didn't, but maybe they do.

Yes, medical insurance premiums can be deductible if they exceed 7.5% of adjusted gross income. Here's one of many web sites that confirm this:
http://www.bankrate.com/brm/itax/tax_ad ... 1122a1.asp
As someone else noted, the standard deduction might still be a better deal for you.

MMFF, good luck with the bun. You won't be a dependent on NN's 2008 return unless you two get hitched this year. But Cletus could be.

Doesn't matter.

marrymeflyfree wrote:I have two tax questions. Both are probably kind of dumb, but I really just have no idea.

First, I won't be working at all in 2008 but will have a meager income from profit sharing and accumulated vacation pay and sick pay, as well as some NJ disability pay for the time that I'm not allowed to work due to the bun in the oven. Can The Naughty Norwegian claim me as a dependent next tax season? Chances are we will marry sometime during the year, but no date set as of yet.

Secondly, I seem to remember hearing that you can claim some medical expenses as a deduction if they add up to a certain percentage of your income. In 2008, what I will pay in insurance premiums and co-pays will almost definitely be greater than my total income for the year (it switches to COBRA after the kiddo is born). Will I be able to claim all of that as a deduction? How does that work?

Only if you get married can the NN claim you.

If you're married both of your medical expenses must exceed 15% of your combined incomes to be deductible. If you don't marry, your income will be so low you won't have to worry about deductions.

Bob Juch wrote:Only if you get married can the NN claim you.

If you're married both of your medical expenses must exceed 15% of your combined incomes to be deductible. If you don't marry, your income will be so low you won't have to worry about deductions.

This is incorrect.

You cannot claim a spouse as a separate dependent.

The medical exemption is 7.5% of AGI which is, of course, the combined incomes.

marrymeflyfree wrote:I have two tax questions. Both are probably kind of dumb, but I really just have no idea.

First, I won't be working at all in 2008 but will have a meager income from profit sharing and accumulated vacation pay and sick pay, as well as some NJ disability pay for the time that I'm not allowed to work due to the bun in the oven. Can The Naughty Norwegian claim me as a dependent next tax season? Chances are we will marry sometime during the year, but no date set as of yet.

Secondly, I seem to remember hearing that you can claim some medical expenses as a deduction if they add up to a certain percentage of your income. In 2008, what I will pay in insurance premiums and co-pays will almost definitely be greater than my total income for the year (it switches to COBRA after the kiddo is born). Will I be able to claim all of that as a deduction? How does that work?

If you get married at any time during 2008, you'll be filing married. So unless you file married filing separately (which makes sense on occasion, but not often), you need to consider both of your incomes. Along those lines, he should adjust his withholding now (as long as you're sure you'll get married this year). --Bob

fantine33 wrote:

Bob Juch wrote:Only if you get married can the NN claim you.

If you're married both of your medical expenses must exceed 15% of your combined incomes to be deductible. If you don't marry, your income will be so low you won't have to worry about deductions.

This is incorrect.

You cannot claim a spouse as a separate dependent.

The medical exemption is 7.5% of AGI which is, of course, the combined incomes.

If you are married, then MMFF would be another exemption on the NN's return, good for $3400, IIRC, this year.

BTW, keep in mind that while you (or the NN) will not get the extra $300 child credit as a rebate, you will get it as part of a refund in 2009. (i.e. the child credit will be $1300.)

If you are married on 12/31/08 you can be claimed as a dependent the entire year of 2008, only if you file a joint return. Then your medical decuctions must exceed 7.5% of the combined AGI. If you file separately, they must exceed 7.5% of your AGI, but like someone else said, your AGI will be so low it won't matter. Also, only one of you can claim the kid as a dependent.

One question: Why wait to get married?

Not necessary.

fantine33 wrote:

Appa23 wrote:

fantine33 wrote: This is incorrect.

You cannot claim a spouse as a separate dependent.

The medical exemption is 7.5% of AGI which is, of course, the combined incomes.

Dependent is the wrong word. If you are married, then MMFF would be another exemption on the NN's return, good for $3200 or $3400, IIRC, this year.

BTW, keep in mind that while you (or the NN) will not get the extra $300 child credit as a rebate, you will get it as part of a refund in 2009. (i.e. the child credit will be $1300.)

Dependent is only the wrong word if you are not asking about claiming someone as a dependent (which she was). If married, she would not be another exemption on NN's return, she would be her own exemption on their joint return.

Good point. I explained my point, inartfully. It would be a joint return, based mainly on NN's income.

(BTW, if you did not understand, I was supporting your post, Fantine.)

I don't care.

Now MY head hurts and it doesn't even concern me!
Exactly why I bundle everything up and send it to someone else. I just sign on the bottom line.

I'm sure accountants everywhere love people like me. Just doing my part to help the economy.

kayrharris wrote:Now MY head hurts and it doesn't even concern me!
Exactly why I bundle everything up and send it to someone else. I just sign on the bottom line.

I'm sure accountants everywhere love people like me. Just doing my part to help the economy.

I loved being an accountant! It appealed to my sense of order. There wasn't much that gave me the satisfaction and enjoyment of taking shoeboxes full of messy receipts and scribbles and turning it into a neat, comprehensible package full of numbers that all added up and were in their proper places.

But that's just me. My spices are not only alphabetized but transferred into matching glass jars and labeled.

fantine33 wrote:

Bob Juch wrote:Only if you get married can the NN claim you.

If you're married both of your medical expenses must exceed 15% of your combined incomes to be deductible. If you don't marry, your income will be so low you won't have to worry about deductions.

This is incorrect.

You cannot claim a spouse as a separate dependent.

The medical exemption is 7.5% of AGI which is, of course, the combined incomes.

OK, technically you'd be an exemption on a joint return, not a dependant, but the bottom line is the same thing.

kayrharris wrote:Now MY head hurts and it doesn't even concern me!
Exactly why I bundle everything up and send it to someone else. I just sign on the bottom line.

hehe...well, in all honesty that is what we will do as well. He has an accountant that will be the one to deal with it all - but I've usually done my own taxes, so I feel like I should know something about something.

I'm just glad that my dumb little questions aren't as dumb as I thought!