I think you are missing the point.The same is true if the money was wages, a pension, or SS. And why does the money need to be "earned"? The medical deduction can offset anything that became part of your AGI for the year.
What is "special" is that some of the money coming from tax-deferred is earned and spent without ever being taxed.
It's a freebee.
It's just a mental accounting in your mind, but not on your tax return.
If you have wages or a pension or SS and put that money into a Roth IRA or into taxable, the money is taxed as income when you earn it. If used later for a medical deduction, it is not taxed as you spend it.
If you put wages or pension or SS into a traditional IRA, it is not taxed going in...and it is not taxed coming out either. In fact those dollars are never taxed.
There are not many situations where you get to spend dollars that are never taxed. This is not mental accounting.
Statistics: Posted by retiredjg — Sat Nov 23, 2024 7:09 am — Replies 35 — Views 1774