12:24pm -0000 05/12/26 Patrick James via gnucash-user <gnucash-user@gnucash...:
>The simplified summary here is that you don't get both the future recovery >and the past medical expense tax benefit. In other words, you're reimbursed >for the amount you claimed as a tax deduction, so that effectively erases >your prior medical expense/tax deduction. The in the weeds discussion is >about the computations given the recovery is in a future year, and then the >larger issue is how to keep TAX REPORTING records for this sort of >situation. >Then there is yet another issue about significance. . . . Your points are well taken. However, Congress had just changed the law, making the purchase of these specific medical supplies eligible for Medicare reimbursement. I was not anticipating reimbursement, hence I took the deduction. The store asked me to allow them to submit the bills as a test case in how they would seek reimbursement as it might mean more business for them in future, so I provided a prescription and authorized them to fuss with the bills. Yhe reimbursement came in three checks, from the store as the received one insurance payment, from Medicare, then from the supplement insurance carrier. >The "income" here is only for tax purposes, as the payment is reimbursement >for expenses from past year(s). Exactly right, which is why when I prepared the tax return, I simply took the reimbursements as a contra expense -- perfectly logical from a bookkeeping perspective -- rather than as other income as required by the tax code. Since I had to fix the other income subaccounts in GnuCash with respect to this issue, I spotted entries for a payment for refundable state income tax credits recorded as "other income". This was during COVID. Since IRS eventually told taxpayers to exclude these refundable credits from reportable income for, er, political reasons, these should have been recorded as a contra expense for state and local taxes with no tax line mapping and not as other income. _______________________________________________ gnucash-user mailing list [email protected] To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
