Customer gave me a list of medical deductions for 2006. One is for health insurance and is about $8000. She said that it is deducted from her paycheck. But I noticed on her W-2 in box 12 a "sc125" for $4223. Isn't a section 125 for paying medical expenses with pre-tax dollars? If so this would not be deductible on Schedule A to my understanding. I guess I need to ask her some more questions on exactly where her numbers came from for the $8000.
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Exactly
Geek, you are exactly correct.
Deduction for section 125 has already been deducted from her W-2 wages. In fact, not only has it been deducted from taxable wages, it has also been deducted from Social Security and Medicare Wages.
If she has $8000 in medical expense deductible on Schedule A, it cannot include the $4223. By the time 7.5% is taken out, she might not have much left to deduct... -
Thanks so much. I am not sure where she got the $8000 for medical insurance unless the employer matches it. She had $8000 medical insurance and then listed doctors and medicine. She actually had enough to deduct medical but the medical insurance increased it even more and it just wasn't making alot of sense based on the income she made.Comment
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