ADR, Based on your income of $46K and a surgery cost of $40K, you could deduct $35,400 off of your Schedule A for medical expenses [$46,000 x 10% = $4,600; $40,000 - $4,600 = $35,400] Hypothetically, if that were your only expenditure on Schedule A (which it probably isn't) you take that $35,400 deduction and add the $3,700 personal exemption that everyone is entitled to, and your taxable income will be $6,900. However, I don't think you're including additional medical costs in the U.S. that I mentioned in my previous posting. Also, unless you live in a state that has no income tax, you can deduct taxes paid on your Schedule A as well. There is a good chance that your taxable income could effectively drop down to 0. You can only go as low as 0. There is no such thing as negative income on one's tax return, with a couple exceptions for people who live in poverty. The bottom line is that every dollar that you have withheld from your paycheck in taxes will be refunded to you.
TPatti, you came close on the amount of taxable income. However, I do not know where you heard of that $11,500 threshold. Beginning with tax year 2013, the threshold for medical expenses increased to 10% of AGI. Prior to 2013 it was 7.5%. It had been at that level for at least 25 years (I graduated college in 1988 and it was 7.5% then). Senior citizens still have a few years where they can use the 7.5% threshold. Take a look at this link off of the IRS website:
2013 changes to itemized deduction for medical expenses
In simple terms ADR, the government will effectively be contributing $12K towards your surgery.
Gene