If you plan to grow old in your house,
you'll probably need to have your home change as your
body does. If you end up using a wheelchair, you'll
need doorways wide enough to accommodate it. Respiratory
problems might require air conditioning or special air
Remodel it right, and the tax deductions
The Internal Revenue Service offers write-offs
for homeowners forced to make medically related alterations.
However, like most things IRS, "these things aren't
necessarily written in English," says Scott M.
Estill, a former IRS senior trial attorney who now operates
his own law practice in Littleton, Colo.
As author of "Tax This! An Insider's
Guide to Standing Up to the IRS," he helps taxpayers
unravel the IRS mystery. If you can say, "But for
the medical condition, I would not have made this home
improvement," you have a deduction.
Many homeowners think that only people who are bound
to wheelchairs are eligible for the break. But temporary
health setbacks count, too. If multiple broken bones
require a wheelchair ramp and landscaping to make it
blend with your house to get you through even four months,
Sam allows it.
The possibilities are greater than you
might think. Here are some of the more common deductions
for improvements that accommodate a medical condition:
- entrance/exit ramps.
- widening doorways.
- installing elevators or chairlifts.
- modifying stairs and/or installing
special handrails throughout the house.
- modifying or lowering kitchen cabinets
to accommodate a wheelchair.
- installing air-filtration/air-conditioning
- bathroom modifications to accommodate
- grading grounds outside the front door
to provide easier access to the home.
- modifying/adding new warning systems
such as smoke-, fire- and health-alert calling systems.
- lowering light switches to wheelchair-accessible
- modifying electrical outlets.
- swimming pools, whirlpool or Jacuzzi
tubs -- but only if there aren't less-expensive alternatives,
such as using the neighbor's pool.
- redoing drywall to remove mold.
Homeowners can't abandon common sense
in this smorgasbord, however. For starters, says Sandy
Botkin, CPA, CEO of the Tax Reduction Institute and
author of "Lower Your Taxes -- Big Time,"
you must make the improvement to alleviate or address
a specific medical condition. Being generally overweight
won't work, but obesity meets the medical criteria.
Aching joints won't get you as far as an official case
And only the treatment counts, so if your
physician prescribes a filter to eliminate pollen in
your home, but you buy an entire central air-conditioning
system, only that filter is deductible.
"The IRS is most likely to challenge
big expenses like elevators, outdoor decks and swimming
pools -- improvements that also could be done for nonmedical
reasons," says Estill. "It's like when the
IRS audits a business. They're not after advertising
and telephone bills. They look at meals, entertainment,
travel -- things that have a lot of fun associated with
That's not to say swimming pools are an
automatic audit flag, but writing off a $20,000 pool
on a $40,000 income might attract unwelcome attention.
So if you intend to deduct, cross all the t's on the
Second, make sure you secure a note from
the doctor stating that water therapy is critical to
your treatment or recovery, not simply that you need
to get exercise, Estill says.
"The more long-term the illness or
disability, the more likely the IRS will permit it,"
he says. "If you say, 'I put in a swimming pool
because I have a three-month rehabilitation program
after surgery,' good luck. I won't make you any guarantees
if I represent you in that one."
Third, keep the reins on the expense sheet.
Botkin shakes his head at the couple who ordered European
tiles to match their home's decor, went whole hog on
the surrounding deck, splurged on automation and ran
up a $195,000 bill.
"The tax court only allowed the reasonable
cost of the pool -- end of story," he says.
Posted: April 12, 2006