I would take these late reimbursements as a Contra sub account underneath medical expenses. Maybe call it reportable late reimbursements or whatever will mean something to you. I believe there is a checkbox that causes particular accounts to show up on a tax report.
On Tue, May 12, 2026, 06:47 Adam H. Kerman <[email protected]> wrote: > Here's a bookkeeping issue I ran into that affects a 2025 tax return. I > confess that, even though the numbered schedules have been part of the > Form > 1040 layout since the 2019 tax year, because they keep changing from year > to > year, I am still not used to them. > > I made a reporting mistake but it doesn't affect taxes owed so I won't > amend > the return unless questioned by IRS. > > There were medical expenses taken as itemized deductions in 2024. They > were > reimbursed by insurance in 2025. At first, I took them as contra expenses > against the insurance premiums, but that seemed wrong, so I took them as > general contra medical expenses. > > After filing the tax return, I found discussion of "recoveries" in > Publication 525. A recovery is a return of an amount taken as a deduction > or > credit in a prior year, and includes reimbursements of medical expenses. > The > recovery is includeable as income to the extent to which there had been a > tax benefit in a prior tax year. For instance, if the standard deduction > had > been taken in 2024, then the recovery of the medical expense isn't > included > as income. > > Going forward, then, I shall not take these as contra expenses if received > in a later tax year. I'll have two separate income accounts, includeable > and > excludeable, with tax-line mapping for includeable only. But I'm still > taking a reimbursement received in the same tax year as the expense as a > contra expense. > > The includeable recovery is reported as Other Income on Line 8z, Schedule > 1. > > That the reimbursement gets treated differently for income tax purposes > depending upon the tax year in which it is received complicates > bookkeeping, > but of course there is no choice. > _______________________________________________ > gnucash-user mailing list > [email protected] > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. > _______________________________________________ gnucash-user mailing list [email protected] To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
