[GNC] Recovery vs. reimbursement

[Patrick James]

The challenge with "both deduction and recovery" is that the reimbursement was unexpected in the prior year, but moving forward the recovery is expected--unless, of course, Congress changes the rules again.

Following my basic strategy of only deduct amounts where the outlook is a high probability of no reimbursement, I would have nothing to dance around. I mean, yeah, sure, I could dance with expected reimbursements, but then that just pushes the same situation into the following year.

But this should be the problem everyone wants! I want unexpected medical reimbursements, and so what if I have to claim the reimbursement as income because I previously expected all the money to come out of my pocket. This is a bit like those mega lottery winnings: "I owe a bunch of taxes because I won a lot of money."

In summary: The bad news is that because of a past deduction to reduce taxes last year there will be an increased tax liability this year. The good news is that the income only goes up by the unexpected cash in hand.


> On 05/13/2026 11:04 AM PDT Adrien Monteleone <adrien.monteleone at lusfiber.net> wrote:
> 
>  
> You volunteered to be an IRS guinea pig? Wow.
> 
> Anyway, if you have both deduction and recovery in the same year (for 
> different events) can you not just take the net and report that result?
> 
> You might have to do a dance with some virtual transactions to get that 
> net into the proper tax-form-linked account, but I should think that is 
> doable. (as long as it is legal of course)
> 
> Regards,
> Adrien
>