Can Utilizing Schedule A Give You a Bigger Refund in 2007?

Each year, I get asked the question, "Should I itemize to get a bigger refund?" The answer is that it depends on what you honestly have to deduct. We'll take a look at each of the deductions on Schedule A to determine if you should itemize or just accept your standard deduction.

The IRS breaks down Schedule A into seven sections. These are Medical and Dental Expenses, Taxes You Paid, Interest You Paid, Gifts to Charity, Casualty and Theft Losses, Job Expenses and Other Miscellaneous Deductions.

The first of these sections is for medical and dental expenses. How this section works is the IRS wants a total of how much you actually paid in medical and dental expenses for the year. The IRS is not asking for what insurance paid or what is still left to pay this year, all they want is the amount actually paid in the tax year. Medical expenses include doctor visits, procedures, surgeries and prescriptions. Certain procedures are not deductible. Plastic surgery is not deductible unless it is to repair a body from accident, such as a car accident or having your face gnawed on by a bear. It's not deductible just because you think you need it. The same goes for a weight loss program. Millions of Americans each year try to lose weight on their own. That's not deductible. However, if a doctor prescribes you for a diet because you are either overweight or because losing those extra pounds would help other diseases, such as diabetes or heart problems, then the program is fully deductible. Prescriptions are deductible, but over the counter medications are not. A good note here is that if you enroll in a cafeteria plan through your employer and the employer takes out money in pre-tax dollars, some over the counter medications would be eligible for monies from that program.

Once you have an amount of money paid in the tax year, there is another figure to know about. To claim these medical expenses, they must be above 7.5% of your adjusted gross income. Any amount that is above this is placed on line four of the Schedule A to be totaled together at the end of the worksheet.