General Definition of Medical Expenses

In its Publication 502, Medical and Dental Expenses, the IRS provides a general definition of medical expenses, and the criteria to be followed in determining whether an expense qualifies as a medical expense.  It then goes on to present a listing of several of the more common conditions and situations that could affect many taxpayers, classifying them as either medical expenses that may be included in the deduction or expenses that cannot be included in the medical expenses deduction.

The general definition provided by the IRS states that, “Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.” The text goes on to say that these medical expenses “include the costs of equipment, supplies, and diagnostic devices needed for these purposes.” Dental expenses are also specifically included as medical expenses.  As additional clarification, the text states that, “Medical care expenses must be primarily to alleviate or prevent a physical or mental defect or illness.  They do not include expenses that are merely beneficial to general health, such as vitamins or a vacation.”

While the text excludes expenses that are “merely beneficial to general health” the definition also includes the term “prevention of disease” among deductible medical expenses.  There is, of course, some room for interpretation, and it is important to evaluate each situation individually to see whether the expenses go along with the spirit of this tax benefit provision.

Categories of Medical Expenses

In keeping with the above-referenced definition of medical expenses, the IRS leaves room for a wide range of traditional and conventional medical practices and alternative means of treatment.  And, there are a number of different categories of expenses that can be included under the concept of medical expenses and that are therefore deductible.  Some of these categories include:

• Fees paid to medical practitioners
• Costs of hospitalization or inpatient treatment
• Surgery
• Medical examinations
• Medications
• Medical aids
• Nursing
• Long-term services
• Capital expenses
• Medical insurance
• Transportation

There are certain cases in which the IRS is very specific about which expenses can be deducted and which ones cannot, and these generally follow the basic premise of what constitutes a medical expense as opposed to an expense for normal personal care.  In these cases a clear distinction is made.

There are other cases in which there may be a combination of medical expense and personal expense involved, and in these cases there needs to be an evaluation of the care provided or the expense incurred.

The following are some examples of different types of expenses, and the criteria or the specific IRS indications that apply in determining whether they are deductible as medical expenses.

IRS Criteria or Indications Applied

Medical Practitioners

Medical practitioners include general doctors and physicians and all types of professionals and specialists in all fields of medicine.  The instructions for Schedule A mention acupuncturists, chiropractors, dentists, eye doctors, medical doctors, occupational therapists, osteopathic doctors, physical therapists, podiatrists, psychiatrists, psychoanalysts, and psychologists as examples.  There are other medical practitioners and specialists that could be added to this list, and provided their fees are for the diagnosis, cure, mitigation, treatment, or prevention of disease, the costs are most likely deductible.

Hospitalization and Inpatient Treatment

The cost of inpatient care at a hospital or similar institution, including meals and lodging, is deductible if a principal reason for being there is to receive medical care. This includes amounts paid for meals and lodging.

Medical treatment at a center for drug or alcohol addiction is a deductible medical expense, including meals and lodging in the center.  Transportation to and from meetings of an Alcoholics Anonymous Group are also deductible medical expenses if attendance at these meetings is pursuant to medical advice that attendance at meeting is necessary in the treatment of alcoholism or drug addiction.

Surgery

The costs of surgery are deductible, provided the surgery is done to promote the proper function of the body or for preventing or treating an illness or disease.  Surgery to improve defective vision, such as laser eye surgery or radial keratotomy is a deductible medical expense.  But, cosmetic surgeries, that are primarily for improving appearance, are generally not deductible.  These include procedures such as face lifts, hair transplants, and liposuction.  However, breast reconstruction surgery following a mastectomy is deductible.  Cosmetic surgeries to improve or correct deformities due to congenital abnormalities or personal injuries suffered in an accident or trauma, or from a disfiguring disease, are also deductible.

Medical Examinations

The costs of medical examinations, including doctor visits, laboratory work, ex-rays, scans, and other procedures to detect or diagnose an illness or medical condition, or as preventive medical measures, are deductible medical expenses.

Medications

Prescription medications are a tax-deductible expense.  Over-the-counter, or non-prescription medicines are not deductible, except for insulin.  Aspirin, for example, is not deductible even if recommended by a doctor, because it does not require a prescription.

Medicines and drugs brought in, or ordered from another country are generally not deductible.  However, if the Food and Drug Administration announces that a certain prescribed drug can be legally imported, then it would be a tax-deductible medical expense.

Nutritional supplements, vitamins, and natural medicines are not deductible unless they are recommended by a medical practitioner for a specific medical condition diagnosed by a physician.  Supplements taken in order to maintain normal good health are not deductible.

Medical Aids

Medical aids include eyeglass, and contact lenses needed for medical reasons, and not for cosmetic reasons.  Fees paid for eye examinations can also be included, as well as the cost of equipment and materials required for using contact lenses, such as saline solutions and enzyme cleaner.

The cost of hearing aids are deductible, including the batteries to operate them.  Other deductible medical aids include braces, crutches, wheelchairs, and guide dogs for the blind or deaf, including the cost of maintaining them.  Diagnostic devices, such as a blood sugar test kit to monitor your blood sugar level is also a deductible medical expense.

Nursing

Nursing Home

The cost of medical care in a nursing home, or home for the aged is tax-deductible, including the cost of meals and lodging in the home if the principal reason for being there is to get medical care.  If you, a spouse, or dependent is in a home for personal reasons, you cannot deduct the cost of meals and lodging in the home, but you can deduct the part of the cost that is for medical expenses or nursing care.

Nursing Services

Deductible medical expenses include wages and other amounts you pay for nursing services, in your home or in another care facility.  The person performing the services does not necessarily need to be a nurse, as long as the services are connected with caring for the patient’s condition.   If the person also performs personal and household services, only the amounts spent for nursing services are deductible as a medical expense.  In this case it will be necessary to determine the amount of time the person spends on nursing services and allocate the cost accordingly.

Qualified Long-Term Care Service

Qualified long-term care services required by a chronically ill individual, that are part of a plan prescribed by a licensed medical practitioner, are deductible provided they constitute necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services.

Capital Expenses

Certain improvements you make to your home or special equipment you add in order to accommodate a disabled member of your household may be included as a medical expense, if the main purpose of the improvements or installation of the equipment was for the medical care of you, your spouse, or a dependent who lives with you.  If the permanent improvements increase the value of your property, you will need to reduce the amount of the medical expense deduction by the increase in value of your property.  If the improvement had no effect on the value of your property, the entire cost of the improvement is a deductible medical expense,  The following are examples of some of these types of improvements:

• Constructing entrance and exit ramps or modifying the areas in front of entrance and exit doorways
• Grading the ground to provide easier access
• Widening doorways at entrances or exits , hallways, stairways, and interior doorways
• Installing railings, support bars, or other modifications to bathrooms
• Lowering or modifying kitchen cabinets and equipment
• Moving or modifying electrical outlets and mixtures
• Installing lifts or elevators
• Modifying fire alarms, smoke detectors, and other warning systems
• Adding handrails or grab bars anywhere (whether or not in bathrooms)
• Modifying hardware on doors.

The cost of these capital improvements must be reasonable in accommodating a home to a disabled condition.  There is a worksheet in Publication 502 to calculate the amount you can deduce for capital expenses.  If a person with a disability rents a home, the amounts paid to have special plumbing mixtures or other implements installed are also deductible medical expenses.

The cost of special equipment installed in a car, so that a disabled person can drive it, is a deductible medical expense. And the cost difference between a regular car and a car specially designed for a wheelchair is deductible.

Medical Insurance

Health and medical insurance is deductible when the policy covers medical and dental care expenses, including hospitalization, surgical fees, X-rays, laboratory tests, medical examinations, prescription drugs, eye exams and glasses or contact lenses, or eye surgery.  Insurance that covers free-choice medical service is also deductible.  And certain qualified long-term care insurance contracts may also be deducted.  In long-term care contracts, there is a limit on the amount that can be deducted, based on the age of the person for whom the premiums were paid.

Life insurance is not considered medical insurance and therefore cannot be deducted.  Also, policies that cover the loss of limb, sight, etc, are not deductible, although the cost of an artificial limb, or for eye surgery would be deductible medical expenses.  Insurance policies that pay for loss of earnings, or a guaranteed amount for a defined period while you are hospitalized for sickness or injury are not deductible.  

The social security tax you pay for coverage under Medicare A is not a deductible medical expense, but the cost of supplemental medical insurance coverage under Medicare B is deductible.

Transportation and Travel Expenses

The transportation expenses you incur in order to receive medical attention can be included as deductible medical expenses.  These expenses include bus, taxi, train, or plane fares, or an ambulance service.  The transportation expenses of a parent who must accompany a child who needs medical care can also be deducted.  The travel expenses of a nurse or other person who accompanies a patient who is unable to travel alone and must travel in order to receive medical care are deductible.  If the travel is to another city, you may be able to include up to $50 per night for lodging for each eligible person, provided there is no element of personal recreation or vacation in the travel.  Meals are not deductible.

If you use your own vehicle to drive to the place where you receive medical service, you can deduct your actual expenses for gas and oil, or take the standard mileage rate.  In either case you can add tolls and parking expenses.

In all cases, the transportation and travel expenses must be primarily for, and essential to, receiving medical services.  Any personal portion of the travel expenses is not deductible.  And a trip taken for vacation, for a rest, or for general improvement of health, even if recommended by a doctor, is not considered a deductible medical expense.  The trip must be for actual medical attention and must be primarily for that purpose.

Other Medical Expenses

Stop-Smoking Programs

A program to stop smoking is tax-deductible.  Prescription medicines to alleviate nicotine withdrawal are also deductible.  But expenses for nicotine gum and certain nicotine patches, for example, are not deductible because they are not prescription medications.

Weight-Loss Program

A weight-loss program is a tax-deductible expense if it is a treatment prescribed by a physician for a specific disease, such as obesity, hypertension, or heart disease.  The expense is not deductible if the purpose of the program is to improve appearance, general health, or a sense of well-being.

If you have a membership in a health club, gym, or spa, you can only deduct separate fees charged for weight loss activities, and only if they are part of the treatment prescribed for a specific disease.

The cost of special diet food or beverages is only deductible if the diet does not satisfy normal nutritional needs, it alleviates or treats an illness, and is prescribed by a physician.  If these tests are met, you can deduct the amount by which the cost of the special diet exceeds the cost of a normal diet.

Dental Care

Dental expenses are tax-deductible, including the cost of fillings, braces, and dentures.  But teeth whitening, which is done primarily for appearance, is not deductible.  Also, while preventive dental exams are tax-deductible, the cost of personal use items, such as a toothbrush, is specifically excluded as a non-deductible personal expense.

Veterinary Fees

Veterinary fees and expenses for the care of pets are not deductible.  But veterinary care for guide dogs for the seeing or hearing-impaired, or other animals specially trained to assist persons with physical disabilities are considered deductible medical expenses.  (Veterinary fees and medicines paid for by farmers would be deductible expenses on Schedule F, Profit or Loss from Farming.)

Health Institute or Health Club

Fees you pay for treatment at a health institute are deductible if the treatment is prescribed by a physician.  Dues for membership in a health club, that you pay to improve your general health are not deductible.

Fertility Enhancement

Finally, the IRS will help out in overcoming an inability to have children by allowing fertility enhancement procedures as deductible medical expenses.  But after that, you are on your own; the cost of maternity clothes and expenses for diapers, baby sitting, childcare, and nursing care for a normal, healthy baby are not deductible.