TAXES... It's that time of year again!

Ok, everyone... I found some inaccurate information being shared on my November 2005 messageboard, which I responded to, so I'm going to share it here too! The allowed deduction for medical and dental expenses is for amounts that exceed your adjusted gross income by 7.5%. Keep in mind, you would have to fill out the schedule "A" itemized deductions, along with a regular 1040 in order to deduct these expenses. Example: if your adjusted gross income was $25,000 last year, you can deduct all costs that exceed $1,875. Don't forget to include the cost of prescriptions and transportation cost to all appointments including all doctor visits, tests, visits to the hospital. You can read more about what cost are allowable under Topic 502 Medical and Dental Expenses, at www.irs.gov. The IRS DOES allow costs associated with weightloss if you are/were diagnosed as obese by your doctor... not including "diet food items." You can only include expenses actually PAID during 2005, and must deduct any that you were reimbursed for. I'm NOT an expert, however, I do have lots of experience preparing tax retuns. I also have degrees in finance and accounting, but got degrees years ago, and laws change FREQUENTLY! A tax preparer or your local IRS office can tell you more specifically what the best option is for YOUR individual case. Any tax software program can help you with medical expense deductions, by asking you very specific questions. Hope that helps! Fortunately, I have great insurance that picked up everything except co-pays for Dr visits and prescriptions...HOWEVER, I know a lot of you paid out of pocket or had much higher co-pays. Good luck, Tammy

Also, if your job has a flexible spending plan where you put pre-tax money and can get reimbursed for unreimbursed medical expenses... that it is wise to do this. I just joined mine. I checked with my insurance plan and if your doctor REQUIRES you to take vitamins and protein supplements and you get written documentation of that...you can get reimbursed out of your flexible spending account. It means you are still paying for it but with non-taxed dollars so it is a savings to you. Heck, take anything we can legally get! Flexible spending accounts also pay for things like eye glasses, copays, even over-the counter medications. Kathy

Kathy, You are sooo right! Flexible spending accounts are great; I've had one for medical expenses for the past 3 years. The company that my employer uses started giving us a VISA card last year that is loaded up with our annual flex-spending contribution. Much easier than having to fill out forms to get reimbursed! Keep in mind that any expense paid for with a flex-spending account can NOT be included under your tax deductible amount, as you have NOT paid taxes on that money. Tammy

Exactly!

Uggghh, TAXES. I was just thinking about those this AM.....I guess it is that time of year. Thanks for the tips!! Hugs, Dianna

Tammy--Tis the season we all look for good tax advice / info. My question to you is: What about Plastic Surgery expenses?? It was highly recommended by 2 docs (my Primary Care and Bariatric Surgeon)for me to have it to help relieve stress off of my shoulders which need to have total joints replaced. I had brachiaplasty (arms) and breasts done. Thanks for any info you might have on this one. God Bless-- Cindy

Cindy, My inital response is, if you have documentation that your doctors say it is medically necessary, then you should be able to include your out-of-pocket expenses as a deduction. That said, I'm going to look into that more, as I know that many WLS folks have paid for these "post-op" procedures. Tammy

**UPDATE REGARDING COSMETIC SURGERY** This is a quote from the IRS Topic 502 mentioned above: "Generally, you cannot include in medical expenses the amount you pay for unnecessary cosmetic surgery. This includes any procedure that is directed at improving the patient's general appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease. You generally can not include in medical expenses the amount you pay for procedures such as face lifts, hair transplants, hair removal (electrolysis,) teeth whitening, and liposuction. You can include in medical expenses the amount you pay for cosmetic surgery if it is necessary to improve a deformity arising from, or directly related to, a congenital adnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease." There is then an example noted referring to breast reconstruction after breast removal due to cancer. Ok, first I'm going to say again... check with YOUR tax expert. My two cents still say, if you have written documentation from your doctor that it is medically necessary, include it in your deductions. Good luck... Tammy