Your Tax Questions Answered

Making Medical Deductions Work

Kiplinger editorial director Kevin McCormally and fellow tax experts Peter Blank and Mary Beth Franklin tackle your most pressing tax challenges.

By Kevin McCormally, Editorial Director, Kiplinger.com

March 10, 2010

QUESTION: I was wondering if I could deduct contributions I made to a medical FSA account through my employer.

KEVIN ANSWERS: You can’t deduct contributions to a medical FSA, but that’s because the pay-ins are already tax-favored. The money goes into the account pre-tax, meaning it doesn’t show up on your W-2 form as income. It would be double-dipping if you deducted the same money.

QUESTION: I was not allowed on TurboTax to deduct the cost of my lasik surgery $5000. I had been told by the surgeon that it was deductible. Who is right?

KEVIN ANSWERS: The cost of Lasik surgery is a medical expense, but that doesn’t automatically mean you get to deduct it. First, you must itemize deductions in order to write off medical expense; second, such expenses are only deductible to the extent that all your unreimbursed medical expenses exceed 7.5% of your adjusted gross income. I’ll bet the tax program did not include the deduction either because you’re better off with the standard deduction or you didn’t pass the 7.5% threshold. If neither of those reasons applies, try running through the q&a in the program again. Good luck.

QUESTION: Is the deductibility of long term care insurance subject to the limitation of total medical expenses having to be in excess of 7.5% of AGI?

KEVIN ANSWERS: Yes. Although long-term-care insurance premiums are deductible (up to certain dollar limits depending on your age), the expense is considered a medical expense, subject to the 7.5% of AGI threshold. Medical expense are deductible only to the extent that all unreimbursed medical expense (including qualifying LTC premiums) exceed 7.5% of AGI.

QUESTION: I had a very serious surgery that could not be performed where we reside. Had to go to Indianapolis for the closest specialist. When I awoke I was completely paralyzed from the waist down. I was there for 13 days then back by ambulance to a rehab section of a hospital in Dayton. My question is: Can we deduct food and lodging expenses for my husband while I was in Indianapolis?

KEVIN ANSWERS: It sound to me like you qualify to add $50 a day for lodging to your medical expenses for the year. Such expenses are deductible to the extent the total exceeds 7.5% of your adjusted gross income.

This is how the IRS describes the deductible expense in Publication 502:

Lodging

You may be able to include in medical expenses the cost of lodging not provided in a hospital or similar institution. You can include the cost of such lodging while away from home if all of the following requirements are met:

1. The lodging is primarily for and essential to medical care.
2. The medical care is provided by a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital.
3. The lodging is not lavish or extravagant under the circumstances.
4. There is no significant element of personal pleasure, recreation, or vacation in the travel away from home.

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. For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. Meals are not included.

QUESTION: I paid for dental work for my 75 year old father. Is there any way to take a tax deduction for this?

KEVIN ANSWERS: Only if he qualifies as your dependent. The keys to qualifying is that you provided more than half of his support in 2009 and his income (not including nontaxable Social Security benefits) was less than $3,650; you’ll find all of the details in IRS Publication 501 .If he qualifies as your dependent, you can add his dental bills that you paid to your other unreimbursed medical expenses and claim a deduction to the extent that the total exceeds 7.5% of your adjusted gross income.

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