Medical Expense Deduction for Convention Costs and Weight-loss Programs
Medical Expense Deduction for Convention Costs
Anyone with a chronic illness or anyone who has a child with a chronic illness knows the frustration of trying to find answers that are many times beyond the knowledge of the physician treating their illness. The encouraging news is that the current fast pace of medical research means there are new answers--sometimes on a daily basis. Today, it is common for chronically ill individuals and members of their families to attend medical conferences to keep themselves apprised of the latest treatment options for their illness.
The IRS will allow a taxpayer with a chronically ill dependent a medical expense deduction for a fee paid to attend a medical conference recommended by the dependent's physician, along with the related transportation costs.
Two important qualifications to this tax break exist, however: (1) the cost of meals and lodging while attending the conference are not deductible as medical expenses; only the transportation costs and conference admission fees are deductible; and (2) medical expenses are deductible only to the extent that their total for the year is greater than 10 percent of all of the taxpayer's adjusted gross income, the usual “floor” placed on itemized medical expense deductions. For tax years before 2017, taxpayers who are age 65 and over or disabled may qualify for a 7.5 percent floor on all deductions, including those for convention costs.
Medical Expense Deduction for Weight-loss Programs
Many people are unaware that the cost of weight-loss programs may qualify as a deductible medical expense when used to treat obesity or hypertension. The deduction is especially valuable for people with flexible spending accounts (FSAs). If your weight-loss program qualifies as a "deductible medical expense," you can pay for it with the pre-tax dollars you allocate to the medical expense portion of your FSA each year.
For many years, the IRS allowed people to deduct the cost of weight loss programs only if the patient had to lose weight as part of his or her treatment for another disease. Obesity, in and of itself, was not considered by the IRS to be a disease. The rationale was that many people lose weight merely for cosmetic, and not health, reasons. That's true, but not for everyone.
Some time ago, the IRS signaled it was changing course when it determined that people could deduct the costs of smoking-cessation programs. In addition, the costs of treating alcoholism and drug addiction were deductible. In both cases, the patient had to be directed by his or her physician to stop smoking or get help for alcoholism or drug addiction. Now, the cost of treating obesity is added to the list.
The IRS provided some examples. Both scenarios involve participation in weight-loss programs. Both taxpayers paid fees for admission into the programs and to attend periodic meetings. They also bought diet plans and booklets. One of the two received a diagnosis of obesity. The other person was diagnosed as suffering from hypertension partially caused by being overweight. Both participated in their programs as treatment for these medical conditions.
The IRS ruled that these two people can take deductions for the costs that are related to their weight-loss programs. However, the cost of buying reduced-calorie diet foods cannot be deducted since they are substitutes for normal living expenses.
If you plan on taking a medical deduction, the relevant costs can be deducted as an itemized medical expense deduction only if they are paid out-of-pocket and if they are neither compensated nor reimbursed (including through a flexible spending plan). Also, the amount of such costs that you can deduct must be in excess of 10 percent of your adjusted gross income (7.5 percent if you or your spouse are age 65 or over). Also note that employee salary reductions for contributions to a medical flexible spending account are limited to $2,600 for 2017 (as adjusted for inflation) for the entire year.
Keep in mind that there are still some unanswered questions. When does overweight end and obesity begin? How much overweight is needed to affect hypertension and to what level must hypertension reach in order to justify deductible weight-loss treatment? Does weight-loss include an exercise program, even though the IRS mentioned nothing in its ruling about exercise as a weight-loss treatment? Does a deductible exercise program include a health club membership or an expensive home treadmill? Taxpayers have yet to test these questions on the IRS.
If you or a family member has considered entering a weight-loss program, please feel free to check with this office on whether your costs might be defrayed through a tax break. Creating a file in which you keep doctor's notes, bills and progress logs could also be important.
Finally, if you or a family member has undergone the expense of a weight-loss program within the past three years, you might want this office to check whether you ought to file an amended return to claim a tax refund.
IRS Circular 230 Disclosure
Pursuant to U.S. Treasury Department Regulations, information contained in this article is not intended by TOPC Potentia P.C. to constitute a covered opinion pursuant to regulation section 10.35 or to be used for the purpose of (i) avoiding tax-related penalties under Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any tax-related matters addressed herein.