[rbkrams]

I work in US on an L1 visa. My wife is on L2. We are both considered residents from the tax point of view, as we were in US all year in 2007. This year, we had some medical and hospitalization expenses. One was when my wife was hospitalized for a few days during pregnancy, and secondly, she delivered a baby a few months later (both in 2007). We also had other medical expenses for our baby later. All of these were under the insurance scheme provided by my employer, and we had out-of-pocket expenses after insurance.

I have a few questions:

1) I would like to understand what kind of tax benefits I am eligible for, and how I can claim them.
2) If I can, then will this be claimed under the itemized deductions?
3) If yes, then if my standard deduction is more than these expenses, should I be claiming these at all, or am I mixing up something here?

Any input on this will be helpful.

[AtlantaTaxExpert]

1-3) It is VERY difficult for you to claim medical expenses as a deduction if you file as a resident alien.

First, it is very likely that your medical insurance payments are being paid with pre-tax dollars, which make them ineligible to be claimed as tax deductions.

Second. Medical costs (co-payments. Deductibles, etc.) are deductible only to the extent that they exceed 7.5% of your adjusted gross income (AGI).

EXAMPLE: Your AGI is $100,000. You have total out-of-pocket expenses of $8,500. Since 7.5% of $100,000 is $7,500, only $1,000 is deductible as an itemized deduction.

Further, if these are your ONLY itemized deductions, they will not exceed your joint standard deduction, which, for 2007, is $10,600.

BOTTOM LINE: It is almost certain that you will NOT be able to deduct your medical expenses on your 2007 tax return.