Tax Law (Questions About Taxes)/Medical Expenses


Hello John,  I hope you can assist me with a tax question.  Each year I itemize my deductions as I have a lot of medical expenses.  I pay my own insurance premiums ($550 per month) and with doctor co-pays and Rx co-pays, I am able to exceed the 7.5 % of my adjusted gross income and achieve a larger deduction than I would if I took the standard deduction.

This year I just had cataract surgery on both eyes.  I have a large deductible on my health insurance policy and my dad assisted me by paying my portion of the doctor and hospital bills for the surgery.  All of the medical providers were paid in full with my dad's assistance.  I will be paying my dad back over the next few years as this was a loan from him, not a gift, even though he wrote the checks to the medical providers.  I make monthly loan payments to him (by check so there is a record).

Will I be able to deduct these expenses on my tax return for 2012?  The issue I am concerned about is that my dad wrote the checks to the medical providers, not me.  However, it was a loan and I am making payments back to him until the amount is paid in full.

If audited, could I have a problem with IRS believing that my dad's payments were a loan since he did not write the checks to me, but wrote them to the medical providers?  We do not have a written agreement about this being a loan, just a verbal understanding.  However, we both keep an Excel spreadsheet with the payments and loan amounts.  He did not want a written loan agreement since I am his son and he has loaned me money before which I have always paid back with no issues.

Thanks for your help.



Thanks for your question.

Since it was a loan, you should be able to deduct the amounts paid.  However, if the IRS audits you, there could be a problem since you do not have a formal, written loan agreement.

The spreadsheets would be helpful, but not conclusive evidence.  I suggest a written loan agreement with specified payments, amounts, and dates.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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