Medical Expense Deductions - John R. Dundon II, Enrolled Agent
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Medical Expense Deductions

Medical Expense Deductions

Many medical costs are deductible including the cost of treatment to alleviate conditions or diseases and the cost of prescriptions and certain diagnostic services. Additional deductible medical expenses include:

  • Capital expenses for special equipment installed in, or improvements made to, a home that provides a medical benefit; these include wider doorways, entrance ramps, modified bathroom or kitchen equipment, and swimming pools for therapeutic purposes.

  • Cosmetic surgery, if necessary to improve a deformity related to a congenital abnormality, accident, or disease.

  • Dental treatments, including braces and dentures.

  • Meals and lodging, if the stay is at a hospital or similar institution to obtain medical care.

  • Orthopedic shoes (extra cost over regular shoes).

  • Prosthetic limbs.

  • Oxygen and equipment used to relieve medical breathing problems.

  • Smoking cessation programs and prescribed drugs to alleviate nicotine withdrawal.

  • Visual alert systems for the hearing-impaired.

  • Medical aids such as wheelchairs, hearing aids, crutches, needles, and other diagnostic devices such as blood sugar kits.

  • Guide dogs or other animals used by taxpayers who are visually or hearing impaired or are otherwise disabled.

  • Weight loss programs as treatment for a specific disease; obesity is a disease as long as diagnosed by a physician. The Tax Court has allowed the extra cost for special diets over the cost of a normal diet when prescribed by a physician to alleviate a specific medical condition.

  • Alcohol and drug addiction treatment, meals, and lodging at a therapeutic center for addictions.

  • Tuition for day-camp programs designed for children with disabilities.

  • The cost of hand controls for a vehicle for the physically handicapped, or the extra cost to design a vehicle to hold a wheelchair.

  • Detachable items such as air conditioners, heaters, humidifiers, and air cleaners used for the benefit of a sick person or for the relief of allergies or other respiratory ailments.

  • Laser eye surgery that meaningfully promotes the proper function of the eyes; vision correction with eyeglasses or contact lenses is also allowed.

  • Out-of-pocket transportation expenses for medical reasons

Medical expenses that are not deductible include the following:

  • Maternity clothes.

  • Teeth-whitening.

  • Diaper services (unless needed to relieve the effects of a particular disease).

  • Dancing lessons, even if recommended by a physician.

  • Funeral expenses.

  • Exercise programs to improve general health, even if recommended by a physician.

  • Marijuana, even if legal under state law when prescribed by a physician in the state where the taxpayer lives.

  • Health club dues (unless they are related to a specific medical condition).

  • Vitamins and other nutritional supplements (unless prescribed by a physician as treatment for a specific, diagnosed medical condition.

For an extensive list of allowable medical expense deductions see IRS Publication 502, Medical & Dental Expenses.

You may only deduct the amount of expenses in excess of 7.5% of adjusted gross income.  If deductions on Schedule A (including medical expenses) are not more than the standard deduction, they may not prove helpful on the federal return, though in many states they may become advantageous.

Medical expenses are reduced by payments from insurance or other sources.  Payments received for the permanent loss or use of a member or function of the body, for loss of earnings related to a physical injury, or damages due to personal injury or sickness do not reduce expenses.

Publication 4345, Settlements – Taxability, reviews those payments which may be taxable.

The one thing that many people over look is that excess reimbursements for medical expenses may need to be included in income.   If you are reimbursed the amount up to the deduction must be included in income if it was previously deducted.

Taxpayers may also be able to claim expenses for themselves as well as other qualifying persons.  A good example of this might be expenses for a parent for whom over half the support is provided.