Question: If I were to pay a medical bill today via credit card but not actually pay the credit bill until next year… Would that be deductible this year or next?
Answer: Good question! A medical bill paid by credit card would be deductible this year. Paying by credit card is equivalent to paying by cash.
You should be aware of the limitations on deducting medical expenses. The 2012 deduction for medical expenses is any amount spent above 7.5% of your Adjusted Gross Income, AGI. For example, if your AGI is $100,000 then 7.5% of AGI is $7,500 (100,000 * 7.5% = 7,500). If your medical expenses for 2012 were $8,500, you can claim a $1,000 deduction (8,500 – 7,500 = 1,000). Basically, you would need incur more than $7,500 of medical expenses to get a deduction.
IRS Circular 230 Disclosure: To the extent this writing contains advice on a federal tax issue, the advice is not intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed in this communication.