Wednesday, December 8, 2010

We are itemizing our medical expenses for 2007, can we prepay our health insurance premiums for 2008?

We are itemizing our medical expenses for 2007 due to exceeding the 7.5% of AGI for medical expenses. Can we prepay my wife's individual health insurance premiums for 2008, so that I get credit for them in 2007? The 12 month amount would be ~$1300 and will be paid for with aftertax dollars. We should not be itemizing next year. Thanks.
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The information in IRS Pub 502 Medical and Dental Expenses disagrees with the previous answers given: ******************** Future Medical Care Generally, you cannot include in medical expenses current payments for medical care (including medical insurance) to be provided substantially beyond the end of the year. This rule does not apply in situations where the future care is purchased in connection with obtaining lifetime care or long-term care of the type described at Lifetime Care—Advance Payments or Long-Term Care, earlier under What Medical Expenses Are Includible. **************************************… The above would indicate that you cannot prepay for an entire year and deduct it the previous year. This rule is consistent with the rule that businesses, even with accrual accounting, cannot deduct prepaid insurance of any kind.
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