@smatthews51 My wife and I are childless, and both of our parents lived into their nineties. As we and our siblings cared for our parents as they aged, we realized that "aging in place" without children to assist as we age was probably not a wise approach for us.
So, in 2028, my wife and I plan to sell our home and move to a "Continuing Care Retirement Community" (CCRC). This will entail a large up-front entrance fee, and monthly payments that cover housing, utilities, meals, maid/laundry service, and medical care from "Independent Living" through "Assisted Care," "Skilled Nursing Care" (aka "nursing home care"), and "Alzheimer's/Memory Unit." Under IRS Revenue Ruling 76-481, our targeted CCRC retroactively designates a portion of the previous year's entry fee and monthly fees as Schedule A Medical Expenses, which are tax deductible if all of the tax payer’s medical expenses exceed a specified percentage of adjusted gross income. (The deductibility amount is generally ~30% of the entrance fees and the recurring monthly fees.)
I am not seeing how to enter the medical deductibility portion of these recurring payments, that treat them correctly as Schedule A medical deductions.
Under the Expenses-->Healthcare tab, Period 5, the "Out-of-Pocket" section seems to be where I could do this, but I would want these expenses to be absent from 2024-2028, then have the one-time entrance fee medical deduction in 2028, then the continuing monthly deductibility to start in 2028, and continue. It looks like the three scenarios are each stand-alone, whereas I need a time-phased set of scenarios that kick in at particular dates. Maybe I don't understand how to structure this to make it fit my scenarios.
If instead I use the Expenses--> Miscellaneous tab to designate the appropriate amounts, dates, COLA and tax deductibility options, I am pretty sure it would not apply the Schedule A tests/limits of MEDICAL deductibility based on AGI.
Can you suggest how I might be able to model this in a reasonably accurate way?
@yankeelaker Pralana Gold considers all medical expenses paid with after-tax dollars to be eligible for the medical deduction on Schedule A (to the extent that they exceed 10% of your MAGI. There's no mechanism for you to specify a percentage less than 100%. Long-term care expenses, shown at the bottom on the Healthcare Expenses page, seems like it might be the place to capture your CCRC costs. They're also assumed to be tax-deductible via Schedule A but there's no mechanism to capture the large up front fee. You could certainly include that fee on the Misc expenses page but, as you suspected, that would not be included in your medical deductions. As a workaround, maybe you could break this cost into two parts with different taxation characterisitics on the Misc expenses page and get close to modeling it in a reasonably accurate way.
Stuart
