©2006 integratedskin.com
Where looking good is understood!
DECEMBER NEWSLETTER
Last month the Integrated Skin Solutions’ Newsletter covered Plans to Pay for Healthcare. This month’s newsletter is a continuation of that topic and will discuss what medical expenses are considered tax deductions on a Federal/IRS tax return. This newsletter will not cover the medical expense deductions available on state tax returns. If in doubt about the information contained in this newsletter then you are advised to seek expert accounting and legal advice.
A note on a figure quoted in last month’s newsletter. The amount you can deduct for medical expenses paid for with cash is the amount above 7.5% (not 2%) of your adjusted gross income.
Uncle Sam Says or What is Deductible
Medical expenses can be deducted for an individual, spouse or anyone claimed as a dependent on a tax return. In general, medical expenses are deductible in the year paid regardless of when the expenses are incurred. Items that can be deducted or legitimately paid for with pre tax dollars can be found in IRS Publication 502 (2005, 31 pages). Additional information can be found in IRS Publication 17 (2005, 296 pages). Some deductible services include:
- Acupuncture.
- Legal medical services from a doctor or physician (including a whole host of other providers).
- Compression hose for those tired legs from venous disease.
- Laboratory fees for tests.
- Medical aids.
- Prescription medicines and in some cases over the counter medications and medical supplies.
- Stop smoking programs.
- Radiological studies.
- Check this one out- Sex therapy at a hospital upon a doctor’s advice. Wonder how this one got in?
- Cosmetic surgery if necessary to improve a deformity related to a congenital abnormality, accident, or disease.
- Wig for the mental health of a patient with hair loss caused by a disease.
The last two items bring up some interesting conflicts with regard to IRS law on deductions. Hair transplants are not deductible but a wig and/or psychoanalysis for depression due to hair loss caused by disease is deductible. An individual could easily be depressed over hair loss due to genetic disease--- male pattern baldness. The hairless individual would be able to deduct the cost of a wig and psychoanalysis for depression caused by hair loss but not be able to deduct hair transplant surgery to cure the problem causing the depression. Similar reasoning could be applied to the treatment of acne scarring. Procedures for the correction of acne scars aren’t deductible although psychoanalysis for depression caused by acne scarring is deductible. Acne scarring should be deductible because it can affect an individual’s potential in life. Its been proven that people who look better and have more confidence/self esteem are more successful in life. You can request a ruling from the tax court on a deduction but it will cost a minimum of $5000. You might ask Bill Clinton to represent you in tax court regarding a tax deduction; especially if it concerns sex therapy, since he has such a wonderful command of the English language.
The IRS has the following language on the books regarding cosmetic surgery.
Section 39.16. Cosmetic Surgery and Other Discretionary Medical Costs
Code Section 213 (d) (9) (A). Amounts paid for cosmetic surgery or similar procedures are not deductible as a medical expense unless the surgery is necessary to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease.
Code Section 213 (d) (9) (B). Cosmetic surgery is any procedure that is directed at improving the patient’s appearance and does not meaningfully promote the proper function of the body or prevent or treat an illness or disease.
Taking the above language into context an individual can deduct expenses for a procedure that is medically necessary to promote the proper function of the body or to prevent and treat an illness or disease even though the procedure incidentally affects the patient’s appearance. An example would be deducting the costs of hair removal for a condition called pseudofolliculitis barbae (ingrown beard hairs that cause infection and scarring) but not for hair removal to avoid the hassle of shaving or to look better. The Tax Court also ruled in a summary opinion that a woman who had lost large amounts of weight could deduct the cost for surgical removal of loose hanging skin that interfered with her daily activities (Al-Murshidi v. Commissioner, T. C. Summary Opinion 2001-185).
Now you know why the government, lawyers and insurance companies should not be allowed to determine how and on what your health care dollars are spent. Elected officials get to determine their health plan, why shouldn’t you have the same privilege?
That concludes our two part series on Plans to Pay for Healthcare. ISS hopes the information has been helpful. Additional information can be found at your local library or by a search on the Internet.
Sincerely,
The Staff at Integrated Skin Solutions- “Where looking good is understood!”
7424 NW River Park Drive (Hwy 9)
Parkville, MO 64152-5028
816.505.5550 Fax 816.505.4550
www.integratedskin.com
Questions or comments- info@integratedskin.com
