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[Purushrottam]

Title says it all. I'm doing my taxes right now. I haven't started doing my research yet so excuse my rather ignorant question. Have any of you written off the costs of Cosmetic LL in your taxes?

[Purushrottam]

I suppose this link answers my question:

https://turbotax.intuit.com/tax-tips/health-care/can-i-claim-medical-expenses-on-my-taxes/L1htkVqq9

What's not deductible?

Any medical expenses for which you are reimbursed, such as by your insurance or employer, cannot be deducted. In addition, the IRS generally disallows expenses for cosmetic procedures. You cannot deduct the cost of non-prescription drugs (except insulin) or other purchases for general health such as toothpaste, health club dues, vitamins or diet food, non-prescription nicotine products or medical expenses paid in a different year.

[Purushrottam]

I think I can still deduct the cost of the prescription drugs (Xaralto $440 X 3) and maybe some travel related expenses.

[Android]

Have you asked a staff member at Paley Institute? They might have answers.

[Purushrottam]

Have you asked a staff member at Paley Institute? They might have answers.

I just called them upon your suggestion. They don't know. They suggested that I contact a tax expert. You can deduct medical expenses if they exceed 7.5% of your income.

If I just deduct my medications, it won't exceed the 7.5% figure. If I include my travel expenses (ie. flight to WPB, Hotel in WPB, etc), then I will exceed that figure. Its a significant chunk of change so it might be worth considering.

Furthermore, if you can itemize the surgery (which is cosmetic) and the X-Rays, and the physical therapy, you might be able to write the latter two off.

[Purushrottam]

I called the billing department. They can't itemize the $90,000 cost into Surgery, X Rays, Physical Therapy, etc. I was hoping that if cosmetic surgery was not covered, then the associated physical therapy might be. I'm still going to try calling a tax expert on this.

If I can do this, I might be able to exempt about $15,000 in LL related expenses. I just want to verify that everything that I'm doing is 100% legal and tax compliant.

Source:
Expenses that CAN be written off:

https://www.irs.gov/publications/p502#en_US_2017_publink1000178887

Expenses that CAN NOT be written off:

https://www.irs.gov/publications/p502#en_US_2017_publink1000179040

[Purushrottam]

Update:

I just spoke with the IRS. I can summarize it as:

You can write off the travel/prescription drug/physical therapy expense if:

"paid for diagnosis, cure, mitigation, treatment, or prevention of disease OR for the purposes of affecting any structure or function of the body"

"the hotel was not extravagant and not part of your recreational activity"

And of course, the expenses have to exceed 7.5% of your gross annual income. So I'm going to make the case that it is "paid for purposes of affecting any structure or function of the body" with physical therapy. PI does not itemize costs so it might be a bit iffy to estimate the cost of physical therapy. I'm going to use the therapists hourly billing rate for the estimate.

If I include the PT, then it exceeds the 7.5% gross annual income (thus can get deducted).

[Android]

Surprising that they didn't know after treating countless patients. Maybe that person just didn't know, maybe their accountant does... But at least you're going in the right direction.

It's strange that they can't itemize the bill. It's either they don't keep records or they just don't want to share the breakdown.

As they suggested, maybe you can find a CPA that specializes in medical care, preferably cosmetic too. Please keep us posted, this is helpful information for many of us.

[FormerKidd]

Surprising that they didn't know after treating countless patients. Maybe that person just didn't know, maybe their accountant does... But at least you're going in the right direction.

I suspect they do not want to be in the business of advising people on tax issues.  Presumably they could be liable if they give incorrect advice.

[Purushrottam]

I suspect they do not want to be in the business of advising people on tax issues.  Presumably they could be liable if they give incorrect advice.

That makes sense. As backup, I'm going to pay extra ($179) to have CPAs from TurboTax review my tax return and represent me in the case of an audit. I also have the reference # from my phone call to the IRS where I asked about the ambiguities (whether or not the associated medical expenses of LL are covered).

[Android]

Sensible decision, good stuff!