Tax planning for a client who will have oral surgery in 2016. Client wishes to prepay the expense in 2015 and claim as a deduction on 2015 Sch A. It appears based on my research that this is not allowable. Just wanted to throw it out there for comment or alternative strategy. Thanks.
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TTB page 4-5
The way I read this is it is ok to deduct pre paid expenses as long as the medical service is not substantially beyond the end of the year. I don't know what substantial means but I would think if the surgery was in Jan or Feb that this is ok. -
Advance payment of anticipated medical expenses doesn't qualify for a current deduction unless there is a contractual obligation to pay in the current year.Roland Slugg
"I do what I can."Comment
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Of course, taxpayer could draw up almost any kind of contract with the oral surgeon. This is similar to paying for braces for kids, where the service might be spread over more than one calendar year, but a huge chunk of the total payment is made up-front. This is simply what the two parties privately agree to. For the oral surgeon to just evaluate the patient and come up with a treatment plan could be considered part of the service provided."You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe HowardComment
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