Maximizing your medical deductions
Special medical needs
If you have special needs, however, there are some costs you can write off. Take into account the cost of a wheelchair, crutches, equipment that enables a deaf person to use the telephone or devices that provide television closed-captioning. Don't forget a Seeing Eye dog or canine for the hearing-impaired, or the costs to retrofit your car with special hand controls or space to hold a wheelchair.
- Installing ramps.
- Widening doors and hallways and lowering counters and cabinets.
- Adjusting electrical outlets and fixtures.
- Grading exterior landscape to ease access to the house.
Some home remodeling also might be just the prescription for a tax break, as long as you follow your doctor's orders and IRS rules. If you need, for example, to add a chair lift to get up and down the stairs because of a medical condition, this is considered a legitimate expense.
Changes to your home to make it more accessible for a handicapped resident also are allowable.
Elevators, however, generally aren't deductible. The IRS considers this a structural change that could increase the value of your house and, therefore, doesn't allow it as a medical deduction.
In calculating residential remodeling as a medical deduction, keep in mind that you likely won't be able to write off the full costs on your tax return. If the improvement increases the value of your property, that amount is subtracted from the project's cost and the difference counts as a medical expense. The value added to your home isn't lost tax-wise. It will increase its basis so that when you do sell, it will help you in reducing any possible taxes owed on that profit.
Household help to care for you or an ailing dependent isn't deductible either, even if it's recommended by your doctor. Such assistance, however, might help you qualify for the dependent care credit.
Medical, but not tax-deductible
Uncle Sam does set some additional medical deduction limits. As a general rule, he doesn't care how we look.
Cosmetic surgery, health-club dues or costs of a weight-loss program that is not medically necessary aren't deductible.
Neither are hair transplant operations or, at the other extreme, electrolysis treatments.
And don't try to write off that expensive bottled water you have delivered each week. Sure, H2O is critical to good health, but the tax collector thinks your tap water will suffice.
For a complete list of what the IRS will and won't allow you to count toward your medical deductions, check out Publication 502. You might find a few things there that apply to you -- maybe just enough to get you over that 10 percent deduction hurdle.