Any IRA deduction will decrease adjusted gross income, which is the base
for determining the medical expense deduction (i.e., 7.5% X AGI).
A lower AGI will result in a smaller nondeductible amount of medical
expenses and a larger medical expense deduction.
Roberta may include as medical expenses the medical insurance premiums, fees for the
alcohol rehabilitation program, contact lenses, and the travel expenses to obtain treatment
at Mayo Clinic in Minnesota.
p. 10-4 and Exhibit 10-1
Cosmetic surgery is necessary (and therefore deductible) when it ameliorates (1) a
deformity arising from a congenital abnormality, (2) a personal injury, or (3) a
Expenses incurred in connection with the restorative surgery
(required as a result of the accident) are deductible because the surgery was
Amounts paid for the
cosmetic surgery (reshaping the chin) are
deductible as a medical expense.
Examples 2 and 3
Helen may include the entire amount paid to the nursing home ($3,000 per month) if the
reason for being in the nursing home is to get medical care. If the primary reason
for being in the nursing home is personal, Helen may include only the $1,400 cost of
medical care in calculating her medical expense deduction.
The full cost of certain home-related capital expenditures incurred to enable a physically
handicapped individual to live independently and productively qualifies as a medical
Qualifying costs include expenditures for constructing entrance and exit ramps
to the residence, widening hallways and doorways to accommodate wheelchairs,
installing support bars and railings in bathrooms and other rooms, and adjusting electrical
outlets and fixtures.
These expenditures are subject to the 7.5% floor only, and the
increase in the home’s value is deemed to be zero.
pp. 10-5 and 10-6
Bob may be able to include the payments related to Harriett’s injury with his own
For divorced parents with children, the noncustodial parent may claim
any medical expenses he or she pays even though the custodial parent claims the children
This rule applies if the dependency exemption could have been shifted to
the noncustodial parent by the custodial parent’s waiver (see Chapter 3).
pp. 10-6 and
David, who is self-employed, may deduct 100% of the premium of $7,500 as a deduction
Joan, who is an employee, may include the premiums of $8,000 she paid in
computing her itemized deduction for medical expenses (subject to the 7.5% floor).
Arturo, a calendar year taxpayer, paid $16,000 in medical expenses in 2005.
Even if he
expects $12,000 of these expenses to be reimbursed by an insurance company in 2006, he
can include all $16,000 of the expenses in determining his medical expense deduction for
2005. He is not required to consider the potential reimbursement in computing his