Settlement and Medical costs

[Gretel]

I was wondering about my medical costs as a deduction on Sch. A. At least one of my injuries might be with subsequent damage, so I also received an unknown amount for pain and suffering. Medical cost were so high that the insurance company paid out the full liability amount.

My thinking is that if the attorney can give me the amount to be allocated to pain and suffering then I would be able to deduct some medical bills. Of course, nobody knows at this point how much money I will need in the future to take care of my injuries, but some funds need to be allocated for that purpose and it should be part of the damage for pain and suffering.

What is your opinion?

I am recovering real well but anyone whoever came in contact with people having a severe car accident knows it is also a very slow process.

[Peachie]

No advice Gretel but..

I sure hope you are managing well and will get back to your new normal soon. Be well.

Peachie

[S T]

Recovery

Gretel,
I hope you are recovering and getting back on your "feet" I am sure that you have had a lot of "medical" issues to deal with from the "description" of your accident. And yes it does take time and lots of medical and physical therapy attention.

I also, don't have a precise answer for you regarding your medical payouts and settlements, but maybe this link will answer some of your questions.

http://www.irs.gov/businesses/page/0,,id=7050,00.html#Settle2

Let us know how you are doing, and I am sure most of us here will be glad to research and provide you with additional information.

Take good care and concentrate on your recovery.

Sandy

[appelman]

My wishes, too, for a speedy recovery.

As to your question, all qualifying medical expenses that are not reimbursed either by your own insurance or by tax-free payments received in a settlement from the other party should be deductible on Schedule A, subject to the 7.5%/10% threshold.

[appelman]

Maybe you are asking something more subtle.

Like whether payments for pain and suffering have to be netted against medical expenses. I would think not -- only payments designated for medical expenses. However, if the settlement doesn't specify, you may have to go back to the original claim or complaint and pro rate accordingly. I hope you don't get too much argument from your client!

[Gretel]

Thanks to all of you. I will talk to my lawyer, but wanted your input first. At one point my lawyer said that my case was a half a million dollar case, which would have left me with roughly $200,000 for pain and suffering. I will let you know.

I am walking almost normally but slow and can only walk so much a day, which seems almost nothing in comparison to what I used to walk. I will be getting there. Thank for all the good wishes and concerns and happy Labor day.

[taxea]

Actual medical payments that are not reimbursed by insurance are deductible. "Settlements" that don't pay the medical expenses are not taxable.