Taxpayers that itemize personal deductions instead of claiming the standard deduction may deduct qualifying medical expenses to the extent that such expenses exceed 10 percent of adjusted gross income (“AGI”). Taxpayers that are 65 years or older, or turned 65 during the tax year, may deduct unreimbursed medical care expenses that exceed 7.5% of AGI. This threshold amount remains at 7.5% of adjusted gross income for these taxpayers until Dec. 31, 2016. I.R.C. §213(f).
I.R.C. §213(d)(1) defines medical expenses as the costs for diagnosis, cure, mitigation, treatment or prevention of disease and for treatments affecting any part or function of the body. While, this definition applies to the costs of health insurance premiums, doctor visits, hospital stays, diagnostic testing, prescription drugs and medical equipment, this definition also permits a wide range of expenses that may not specifically fit into one of the aforementioned categories. Here are a few examples:
Supplies & Equipment
Adaptive equipment
This category includes wheelchairs, commodes, bath chairs, and other items needed for a disability or condition.
Equipment & supplies for newborn babies
Breast pumps and other nursing supplies that assist lactation qualify. Diapers and baby formula are not tax-deductible. However, if the formula requires a prescription, the cost in excess of the cost of nonprescription formula may be deductible.
Diabetes-related supplies and equipment
Insulin, blood-testing kits and accessories are deductible.
Vision-related and hearing-related supplies & equipment
This includes the cost of eye surgery, eye exams, contact lenses, contact lens insurance, Braille books and prescription glasses (including sunglasses). Those taxpayers afflicted with hearing-related issues may deduct the cost of exams and hearing aids.
Wigs
Cancer patients that lose their hair from chemotherapy may deduct the cost of wigs.
Treatment
Special education costs
Costs to address physical, mental or emotional conditions qualify.
Acupuncture
This alternative medical treatment is deductible.
Rehab treatment programs
The cost of in-patient and out-patient treatment programs for alcohol, drug addiction and other medical problems is deductible.
Smoking-cessation programs
While doctor-prescribed treatments may qualify as deductible expenses, over-the-counter gums, patches and other treatments do not.
Organ transplants
While it is illegal to pay for an organ donation, the expenses of the organ recipient and donor are deductible expenses.
Sex-reassignment surgery and hormone therapy
Breast augmentation surgery is not if it’s for cosmetic purposes.
Reproduction-related cost.
This category includes the cost of abortions, vasectomies, birth control pills, pregnancy test kits, and fertility treatments.
Weight-loss programs
Such programs are not deductible unless the individual suffers from a medical condition like obesity.
Special diets
Doctor-prescribed foods to treat a medical condition may be partially deductible. Only the cost of special foods that exceeds the cost for regular foods is deductible, which is difficult to substantiate and prove.
Home
Home adaptation and remodeling
Improvements installed to accommodate a disability like wheelchair ramps, bathtub handrails, as well as other permanent changes to a home are fully deductible. However, it is worth noting that the cost of special home devices or equipment to address a health condition is deductible only to the extent it does not increase the home’s value. Installing a swimming pool pursuant to a physician’s treatment recommendation is deductible only for costs above any increase in the value of the home.
Caregiver costs
If an individual struggles or is unable to manage everyday living tasks like bathing and using the bathroom, the cost of any assisted living care is deductible.
Service animals
The cost and maintenance (food, training, medical bills) of a Seeing Eye dog or other service animal is entirely deductible.
Travel
Lodging while receiving medical treatment.
Out-of-town treatment is deductible up to $50 per night. Parents that accompany a minor child for out-of-town treatment may both deduct $50 per night (i.e., $100 per night).
Attending a medical seminar.
The cost of admission and transportation to a seminar relating to a taxpayer or his or her spouse’s chronic condition is deductible. However, meals and lodging expenses are not.
Travel costs.
Cab fares and public transportation may be deductible. If a personal vehicle is used, the IRS-set mileage rate (23 cents per mile in 2015), may be a point of guidance. However, to substantiate a claim for these types of expenses, taxpayers must maintain thorough and accurate records.
Some examples of expenses that are not qualifying medical expenses include premiums for life insurance, disability, loss of limbs, or similar benefits; payments made in advance for services to be rendered in the next tax year; athletic club memberships; bottled water; cosmetic surgery and procedures; cosmetics and hygiene products; funeral, cremation, or burial expenses; maternity clothes; non-prescription medications; scientology counseling; swimming pools; and travel expenses for better general health.
If you suffer from a medical condition and have any questions about qualifying medical expenses that may deducted from your taxes, call THE TAX EXPERTS at the Thorgood Law Firm www.thorgoodlaw.com. For a FREE consultation call 212-490-0704.
