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    PinkDakotaRose's Avatar
    PinkDakotaRose Posts: 1, Reputation: 1
    New Member
     
    #1

    Apr 3, 2008, 02:29 AM
    Itemize medical bills?
    I did not pay any taxes last year due to being on SSDI and not working. However, my medical bills added up to 52% of my gross income (I earned $14000 on disability and paid $7300 for insurance, medications, dental work, and doctor's visits out of pocket after insurance). Would there be any reason for me to file a return for last year? Thanks in advance!
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
     
    #2

    Apr 3, 2008, 04:24 AM
    Yes, your income may be taxable.
    Payments you received from a disability insurance policy that you paid the premiums for are not earned income. It does not matter whether you have reached minimum retirement age.

    If this policy is through your employer, the amount may be shown in box 12 of your Form W-2 with code "J." Then it will be reported as income.

    If you retired on disability, benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. You must report your taxable disability payments on line 7 of either Form 1040 or Form 1040A until you reach minimum retirement age.

    Now about your medical expenses. These are available only if you itemize your deductions. Also you will get medical expense that are over 7.5% of your AGI. For you $6,250 ($7300 minus $1050) is deductible.

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