Matt, a calendar year taxpayer, pays $11,000 in medical expenses in 2012.He expects $5,000 of these expenses to be reimbursed by an insurance company in 2013.In determining his medical expense deduction for 2012, Matt must reduce his 2012 medical expenses by the amount of the reimbursement he expects in 2013.

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For tax purposes, medical expenses are deductible in the year they are paid, regardless of expected future reimbursements. Matt should not reduce his 2012 deduction by the expected 2013 reimbursement.

Matt, a Calendar Year Taxpayer, Pays $11,000 in Medical Expenses