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Columns: Tax Talk
George Saenz, CPA   Expert: George Saenz, CPA
Tax Talk
Going abroad for surgery? You can deduct some expenses
Tax Talk

Foreign medical care deductible

Dear Tax Talk:
If a person has surgery in another country (Mexico) and pays for it out-of-pocket, are those expenses tax deductible (travel, hospital, surgeon)?
-- Mary

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Dear Mary,
News reports have recently focused on the popularity of overseas surgical procedures. We now call it medical tourism. Not only are these procedures less expensive, patients have said that the aftercare is superior to procedures done in the United States. I've heard clients and friends say that the doctors give you their cell phone numbers and don't think twice of visiting you in a hotel or other facility to monitor your progress. Unfortunately, most insurers (including Medicare) are unwilling to cover procedures performed overseas. Ironically, though, Blue Cross of California was offering employers premium reductions for selecting HMOs that require the insured to seek nonemergency care in Mexico.

Medical expenses are itemized deductions. The total of all your medical expenditures for the year are only deductible to the extent they exceed 7.5 percent of your adjusted gross income. For example, if your AGI is $100,000, you can only get a tax benefit for your medical expenses if they exceed $7,500 and you otherwise itemize.

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. There is no requirement in the regulations that the procedures be performed in the U.S. by a licensed professional or institute. Because this obviously invites room for abuse, I recommend that you obtain proper documentation of the procedures and amounts spent.

Travel expenditures and lodging while away from home can also be considered medical expenses. You can include in medical expenses amounts you pay for transportation to another city if the trip is primarily for, and essential to, receiving medical services. The amount you include in medical expenses for lodging cannot be more than $50 for each night for each person. You can include lodging for a person traveling with the person receiving the medical care.

Bankrate.com's corrections policy -- Posted: Sept. 27, 2007
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