Medical Expenses Deduction

MEDICAL EXPENSES - DEDUCTIBILITY IN PERSONAL INCOME TAXATION

INTRODUCTION

Federal Income tax code specifies the generally deductible expenses in the personal taxation of an individual which include medical expenses certain taxes , mortgage interest , investment interest and charitable contributions . These deductions mentioned in the chapter are known as itemized deductions . It has to be noted that any expenditures not specifically allowed as itemized deductions are not allowable against the personal income subject to tax . Medical expenses paid out by the taxable individual on himself , spouse and dependents are allowed as an itemized

deduction . The additional points to be noted are that the deduction is allowed only to the extent to which the medical expenses are not reimbursed and the deduction is limited to 7 .5 of the taxpayers Adjusted Gross Income

DEFINITION OF MEDICAL EXPENSES

The definition of medical expenses is very broad to cover not only the expenses incurred for the diagnosis , cure , mitigation , treatment , or prevention of the disease but also covers expenses incurred for preventive health cover and costs of periodic physical and dental examinations of the taxpayer . The important point here is that such deductions are allowed even when the taxpayer is in good health . Hence such medical expenses incurred for the treatment of diseases affecting any structure or function of the body are termed as medical expenses for the purpose of assessing the income for tax purposes

COSMETIC SURGERY-DEDUCTIBILITY

Expenses incurred for Cosmetic Surgery are deductible when the surgery is necessary to

ameliorate

a deformity arising from a congenial abnormality or

a personal injury or

A disfiguring disease

Any medical expenses incurred on cosmetic surgery for purposes other than those which are unnecessary are not deductible . For example , fees paid to a cosmetic surgeon for a face lift of a person of 75 years age to improve his appearance is unnecessary and hence not deductible . But the cost of restoring the face by cosmetic surgery , which is disfigured in an accident , is deductible

DEDUCTIBILITY OF CERTAIN OTHER EXPENSES

4 .1 COSTS INCURRED IN A NURSING HOME /HOME FOR AGED

When a person is admitted in a nursing home or home for the aged primarily to get medical care , then the expenses incurred for the nursing home expenses including meals and lodging are allowable as a deduction . However if the primary concern for being admitted to the nursing home or the home for aged is personal , only the expenses paid for medical or cursing is deductible , whereas , costs of lodging and meals are not deductible

4 .2 TUITION EXPENSES

When a dependent is sent to a school having special resources for alleviating the infirmities caused by mental or physical disability , the tuition expenses paid to the school is an allowable deduction . In such cases , the cost of meals and lodging in addition to the tuition fees is allowable

4 .3 MEDICAL EXPENSES INCURRED FOR SPOUSE AND DEPENDENTS

A taxpayer is entitled to claim the deduction in his adjusted gross income of the medical expenses incurred by him on...