Posts Tagged ‘Schedule A’

Reminder on Schedule A No Cosmetic Surgery Unless

Wednesday, October 14th, 2009

I was teaching my students about business and Schedule A deductions for medical expenses.  Inevitably, the topic of cosmetic surgery comes up and I always need to explain it.  Generally, cosmetic surgery is treated as an elective surgery so that nose jobs, boob jobs, tummy tucks and the like are not tax deductible as medical deductions.

A lot people try to claim the cosmetic surgeries that they need it for business, as part of marketing, etc but that isn’t an easy thing to prove and the law is pretty clear as to what is considered required by a doctor.  The IRS deals with a lot of doctor’s letters and by extension, a lot of doctored letters so they know the difference and so does the Franchise Tax Board here in California.  It is important to take what legal deductions you can and not try and stretch the truth which will only cause you heart ache and cause more medical visits (which in turn I suppose will generate more medical deductions).

The exceptions are if the cosmetic surgery is required for a life threatening situation.  For example, if the cosmetic surgery is restore a face after being in a horrible car accident that should be a qualified medical deduction.  To voluntarily get the lap band isn’t a deduction unless you were considered morbidly obese and had a letter from a doctor stating that.

If you are an actress or adult entertainer, there have been tax cases where the IRS has held that in tax court certain things like breast augmentations were a legitimate enhancement that helped business but that would be a business expense and probably should be on a Schedule C with the rest of your business income and deductions.  Letters of supporting information such as showing income before and after any breast implants would enhance your standing and chances of the deduction sticking.

Didn’t realize that income tax information could be so informative and entertaining, did you?

Stay well everybody.  And Happy Birthday to Arianna!  Whoo hoo!

Oct 14 2009

Kim Isaac Greenblatt

Reminder on Schedule A No Surgery Unless

Medical Expenses on Schedule A Question

Friday, September 12th, 2008

I had a question from a reader about Medical Expenses, specifically, the age old general question, what qualifies as a medical expense?

First, you need to have enough deductions so that you can file with a Schedule A, Itemized Deductions.  The medical expenses generally (at least for 2007) can only be deducted if they exceed 7.5% of the amount of Form 1040, line 38 (that is your adjusted gross income and the line number it appears on may vary from year to year depending on what changes are happening with tax law and tax forms).

You will want to look at Publication 502 that will explain in detail what you can and cannot deduct as a medical deduction.  Some examples of valid medical deductions are doctor co-pays, medical  insurance premiums, dental insurance premiums and long term care premiums (make sure you double check with Pub 502 to see if they are valid medical plans for coverages).

Prescription medicine and insulin  are deductible.

Hospital visits where you are not reimbursed by an insurance carrier are deductible.

Lab work is deductible as well.

Medical treatment for drug and alcohol addiction.

Eyeglasses and eye exams.

Some items that are not deductible are:

Vitamins

Cost of diet food

Cosmetic Surgery

Vitamins, despite what anybody tells you are not medical expenses no matter how well they are working for you and keeping you alive.  Same holds true for diet food or cosmetic surgery.  Now, the one surgery that is deductible is if you were medically designnated as morbidly obese and you need the surgery to save your life because your weight problems were literally killing you.  That has to be with documentation from an appropriate doctor and probably surgeon.

You would best check with your tax professional when in doubt.  Depending on your vocation, there may be some items that may be deductible but you would have to look at how the deductions directly apply to your vocation and income.

Remember that the medical expenses of your wife and your dependents are added into the Schedule A as well.  Just make sure that you hold onto your receipts for the hospital visits, the co-pays, the medicine, pharmaceuticals and whatnot.  If there are special changes you need to do to your house to accomodate your medical condition, be sure to research that or have a tax pro look into it as well.   There may be some deductions there as well.

Hope that talking about taking legitimate medical expenses makes you “feel better”!

Kim Greenblatt

 

You are reading about medical expenses in Kim Greenblatt’s blog, profitable.