When claimed under my spouse with a lower income the medical expenses creates audit warning. What do I do?

[skippingrock]

Hello, TurboTax is recommending that I claim my medical expenses under her income which is less than mine, but when I do I get an "Audit Risk Alert!" on the Audit Defence page.

Medical expenses exceed 5% of your annual income or are $5000 or more. Note: Medical expense amounts are located in box 85, "Employee-paid premiums for private health plan," of your T4; box 135, "Recipient-paid premiums for private health services plans," of your T4A; or in receipts that you've entered. 

In our experience this is a red flag that may put your tax return at an increased risk of scrutiny by the CRA. Red flags could result in anything from a simple request for additional documentation, an in-depth review, or a full audit. We suggest you use the navigation tabs at the top of the screen to return to the appropriate section of the TurboTax interview to review this information and make changes if appropriate.

When I move the medical expenses to my return, we don't get this error, but then we also get around $100 less in our return.

Is this just a false-positive and ignore the warning, or should I head it and move it to mine? Or should can I split the expenses between the two returns? I didn't see how to do that, it looks like only one or the other.

Cheers and thanks!

[fuzzy · Accepted solution]

Ignore the warning....perhaps turbotax wants you to purchase an un-necessary audit defence or other upgrade.  Enter the medical expenses on the return where you get the best tax advantage. 

[skippingrock]

Yeah, I find this really interesting as when you are doing the entry it "recommends" to choose my wife's return. "Claim under 'wife's' return (Recommended)". And then upon following the recommendation they give you a shock. Paying for the Audit Defence would nearly negate the $100 I would get.
Thanks for the super-clear answer, it wasn't fuzzy at all! 🙂