Accounting Homework - Tax Issues?

first saw this hours ago. the key is Dec/Jan. [ i e different tax years ] If C maintains the medical debt in 2012, she can possibly put some* of it on her Schedule C to lower her taxable income. If she gets reimbursed (you did not say by how much, but often 80%) she would definitely have no $ entry on her Schedule C.

*Reality check. Considering that she can only post on the schedule C the amount of her medical expenses that exceed 7.5% of her income (say a modest $40,000; = $3,000 excluded = 5700) C would not exceed the standard deduction ($5,750 for a SINGLE person (I believe) for 2012). However, it would form a good base to get a tax benefit from other things like charitable deductions and state sales tax. [ At $40,000 I am going to assume C is not buying a house, so there is no interest or property tax deduction. ]

If C is married, H & W would have twice the standard deduction. And with twice the income the potential tax reducing deduction shrinks. Then only if H & W are buying a house and or giving a large amount to charity, would the 2012 total medical expenses help them tax-wise.

But then, her net medical expenses in 2013 would be lower by the amount of the reimbursement, meaning probably no chance for a medical deduction on 2013.

{This rarely comes up, because most clinics bill the insurance company directly.}

ok you intend to make the adjustment for depreciation value by: dr depreciation value (kit)10,000. cr accrued depreciation (kit) 10,000. once you position up this to the ledger, your accrued depreciation (kit), would have a 40,000. credit stability. i desire this helps.