There is much confusion about what the Internal Revenue Service allows as medical expenses.
Sure, most of you know about deducting physician bills, hospital stays and prescriptions. But let’s explore some frequently overlooked medical deductions that might yield significant tax savings.
The IRS limits your medical deduction to expenses that aren’t reimbursed by health insurance, flexible spending accounts or tax-advantaged plans unless they exceed 7.5 percent of adjusted gross income (AGI) for taxpayers for 2017.
But starting Jan. 1, 2019, allowable medical expenses must exceed 10 percent of AGI. Claim your medical expenses by attaching Schedule A, for itemized deductions, to your 1040 long form.
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Writing off medical expenses because they merely benefit your general health usually isn’t allowed. That’s why, for example, costs of taking most vitamins and vacations typically aren’t tax deductible.
Eligible expenses include medical equipment, supplies and diagnostic devices alleviating or preventing physical or mental deficiencies or illnesses.
Cosmetic surgery for procedures that seek to improve a patient’s appearance is hard to write off. To be deductible, cosmetic surgery costs must significantly promote proper body function, and treat or prevent illness and diseases.
Most cosmetic surgery to improve deformities occurring from an ongoing abnormality, injury or disfiguring disease is a write off, though. Expenses of elective cosmetic surgery, for the most part, are not deductible – unless necessary to improve a deformity that stems from some congenital abnormality, personal injury, acting trauma or disfiguring disease
Costs to improve one’s general health or relieve physical or mental discomfort aren’t deductible. IRS rulings, however, only allow writing off gym memberships treating specific medical conditions, such as obesity or high blood pressure, for prescribed workouts and participation in life-saving weight-loss programs to manage or mitigate health issues from a physician’s diagnosis.
Most of us cannot write off gym memberships unless our life depends on it. A doctor must mandate, based on written diagnosis, and prescribe joining the health club facilities to treat severe medical conditions individually.
Treatment costs for substance abuse usually are OK to deduct. Write off professional treatment for alcoholism, drug addiction and food disorders such as Anorexia or Bulimia.
Intervention services, often running from $1,400 to $10,000 to educate, mitigate and transport, might be deductible, too.
A weight-loss program is deductible if your doctor believes it is medically necessary to reduce or relieve the risk of diseases like hypertension, diabetes and obesity and recommends the regimen.
Weight loss programs for maintaining general good health, such as Weight Watchers and Jenny Craig, that aren’t medically essential usually aren’t tax deductible.
Fertility, birth control and transgender surgery
Fertility enhancement procedures, which can cost into the thousands, are deductible. Vasectomies, sterilization and physician-prescribed birth-control pills also are deductible.
Transgender individuals can deduct the cost of gender reassignment surgery. Allowable costs include hormone and their sexual reassignment surgery because this is believed to be a treatment for a gender-identity disorder.