IRS Standards?? or Budget

[2muchinDebt]

I've read there are "standards" or something like that for your budget. Does the Trustee set up your budget?

What happens at Xmas? Can't you buy Xmas gifts for your kids..even small ones? Are you supposed to buy a fmaily of 4 clothes on $50 a month. Is it really that bad? Just wondering.

[justbroke]

I've read there are "standards" or something like that for your budget. Does the Trustee set up your budget?

What happens at Xmas? Can't you buy Xmas gifts for your kids..even small ones? Are you supposed to buy a fmaily of 4 clothes on $50 a month. Is it really that bad? Just wondering.

Well, yes there is a budget. It's based on either the IRS Standards or your actual costs as of the time of filing. Whether you get to use the IRS standards is if you are an above median income earner, based on your State and family size.

You don't get a Christmas budget, so to speak.

Don't worry about having to live on $50/month for clothing for 4. The IRS standards are, in some cases, generous. For example, a family gets $1,370.00 a month "allowance" for clothing, food, housekeeping supplies, personal care, and miscellaneous.

Similarly, you get a $57/per person "out of pocket healthcare" allowance.

http://www.usdoj.gov/ust/eo/bapcpa/meanstesting.htm

[2muchinDebt]

Similarly, you get a $57/per person "out of pocket healthcare" allowance.

http://www.usdoj.gov/ust/eo/bapcpa/meanstesting.htm

Been reading up on some of that..however..I am a 37 yr old diabetic and all 4 of us have allergies. I'd say we spend at least $200/mo on prescriptions (and that's with insurance) then there's lab fees occasionally (every 3 months) and co pays after we meet the deductible. DD's braces, and dental cleanings 2x a year for 4 of us and we all wear glasses. Are some of those things added seperately?

[justbroke]

Been reading up on some of that..however..I am a 37 yr old diabetic and all 4 of us have allergies. I'd say we spend at least $200/mo on prescriptions (and that's with insurance) then there's lab fees occasionally (every 3 months) and co pays after we meet the deductible. DD's braces, and dental cleanings 2x a year for 4 of us and we all wear glasses. Are some of those things added seperately?

First, let's talk about medical. You can deduct your medical insurance as well as your "medical savings account" (MSA) expenses on your form! This money is part of your budget, so don't worry about routine items that are covered 100% by your medical plan. If you have extraneous expenses that are outside your medical plan, then use the MSA for those. Again, that comes as an allowance.

In special cases, there is even room on the form to deduct (allow) medical expenses for medical conditions which are persistent.

So, you will be able to deduct, basically, your actual medical expenses. The number I gave above, are for "incidental" medical expenses that pop up... like cold medicine, co-pays, etc. If you have fixed prescription costs, you should probably get an MSA.

[2muchinDebt]

Thanks for explaining that! By "medical savings acct" do you mean one of those through work where you put $$ before taxes? If so we do have one of those. We should be OK barring any major medical things that pop up and hopefully that's not for a very long time!