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AGI for 7.5% medical expense limitation

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Perhaps this has been answered before, but why does Lacerte use line 9 of 1040 rather than line 11 on Sch A line 2 in computing 7.5% limitation amount on line 3?

Lacerte Tax

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rbynakerAnswer

Level 13

What it should be doing is line 9 minus line 10a. If there's nothing on line 10a then it will look like it's just using line 9. If you have a case where it's using line 9 without subtracting 10a then you have an "unexpected behavior".

Line 10b and Schedule A never exist in the same universe. So if you have something on 10b you are not filing Sch A so it doesn't matter how much the medical expenses you're not deducting are being reduced.

Rick

BobKamman

Level 15

Is that true?

I don't use Lacerte but now I'm worried about ProSeries. My home computer doesn't have the program. Maybe someone else can check it out.

abctax55

Level 15

It's NOT considering JUST the $ 300 above the line charitable in pulling over line 11.

Now, whether that's correct or not... no clue.

$300 x 7.5% = $ 23. Not material in my practice, especially since so few of my clients get their medical deduction.

HumanKind... Be Both

R

RonWAuthor

Level 3

Exactly right, not taking the $300 charitable in pulling over line 11. Nothing in the instructions indicates that should be the case so I don't understand why.

Anyway, I agree, not material and non-issue for most of my client base.

Thanks

abctax55

Level 15

@IntuitAustin

@IntuitBettyJo

Houston, we seem to have a problem. Not a major one, but still an issue. Thanks

HumanKind... Be Both

BobKamman

Level 15

@RonW "why does Lacerte use line 9 of 1040 rather than line 11"

Line 9 is total income without any adjustments. Is that what you meant?

R

RonWAuthor

Level 3

Yes

rbynakerAnswer

Level 13

What it should be doing is line 9 minus line 10a. If there's nothing on line 10a then it will look like it's just using line 9. If you have a case where it's using line 9 without subtracting 10a then you have an "unexpected behavior".

Line 10b and Schedule A never exist in the same universe. So if you have something on 10b you are not filing Sch A so it doesn't matter how much the medical expenses you're not deducting are being reduced.

Rick

abctax55

Level 15

Jeeze.... didn't see THAT forest for the trees. Rick, your brain is working way too well for a Sat a.m.

@IntuitAustin @IntuitBettyJo

OK.... leave the programmers alone so they can focus on the UIC revamp instead.🤣

HumanKind... Be Both

rbynaker

Level 13

@abctax55 wrote:

Jeeze.... didn't see THAT forest for the trees. Rick, your brain is working way too well for a Sat a.m.

Nah, I spent half a day banging my head into the wall on this stuff back in December when the draft forms came out. So I've had time for the wounds to heal.

I have a Recap spreadsheet that mimics the tax return and I've had to do major revisions every year for the last three years because they keep changing the tax forms (and laws). In my attempt to optimize deductions, I started with all sorts of nested if statements trying to logic my way through this mess and kept running into circular calculation problems. Then I finally realized all I needed was a subtotal of AGI before the potential charity deduction and then I needed to evaluate [total itemized] vs. [standard plus the lesser of $300 or cash_charity]. It's March already and it seems like I'm still finding at least one bug per week in the spreadsheet. This week's bug involved the tax calculation for MFS. Next week's bug will be that it doesn't subtract up to $10.2K of unemployment. 🙂 I suspect I'll need to add another subtotal in the margin somewhere for Section 85 MAGI. Oh boy!

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