The tax law allows individual taxpayers to deduct certain medical expenses from their adjusted gross income. For 2005, a taxpayer may deduct the amount of medical expenses that exceeds 7.5% of his/her adjusted gross income. May I Deduct Medical Expenses That Were Paid For Someone Else?Yes, but only if the medical expenses were paid for your spouse or your dependents (e.g. children, parents, siblings) at the time the services were rendered or expenses were paid. What Are Medical Expenses?Under the current tax law, medical expenses include amounts paid for: - The diagnosis, cure, mitigation, treatment, or prevention of disease;
- The purpose of affecting any structure or function of the body;
- Transportation and lodging costs incurred on trips primary for and essential to medical care (but not meal costs);
- Qualified long-term care services; and
- Medical Insurance (including the amount for Medicare paid as a part of your social security tax)
Lodging costs include costs paid for someone other than the taxpayer who must accompany the taxpayer in seeking medical care (e.g private nurse or relative). The lodging deduction is limited to $50 per individual per night. Is The Cost of Cosmetic Surgery Deductible? Maybe. The cost of cosmetic surgery that a taxpayer undergoes voluntarily to improve his/her appearance but not to meaningfully promote the proper function of the body is generally not deductible. However, the cost of weight-loss program has been deemed deductible if it is undertaken to relieve a disease or a defect, such as obesity or hypertension. Furthermore, costs for breast reconstruction after a mastectomy and vision correction by laser surgery are also deductible medical expenses. Smoking-cessation programs that help alleviate the symptoms of nicotine withdrawal are usually deductible, but the nicotine gums and patches that can be purchased over the counter are not considered medical expenses. Is The Cost For Special Schooling For Physically Or Mentally Handicapped Children Deductible? Yes. Additional amounts paid or incurred for special schooling or psychiatric treatments for physically or mentally handicapped children are deductible. Is The Cost Of Living In A Retirement/Nursing Home Deductible? Maybe. If the primary reason for living in the retirement/nursing home is that you have a physical condition that requires constant medical care, then the entire cost of living in such home is deductible. If living in the retirement/nursing home is primary for personal or family reasons, then only the costs attributable to medical care that you receive in such home are deductible. Is The Cost Of Home Improvement For My Physical Condition Deductible? Generally yes. For example, you may deduct the cost of installing an elevator if you are physically handicapped. However, the deduction is limited to cost of the improvement that exceeds the appreciation to your home after the improvement. For example, if installing the elevator in your house will make your house worth $50,000 more, then you can only deduct the cost of the installation that exceeds $50,000. Do I Need an Attorney to Help Me with My Tax Problems? Tax laws are complex and ever-changing. Although there are various tax preparation softwares on the market that may help you with your tax problems, they cannot provide the same level of service that an experienced and knowledgeable tax attorney can. If you are unsure about the characterization of your expenses or you need someone to represent you before the IRS, a tax attorney can help you. |
