Is Your Medical Trip Tax Deductible?
What do tortillas, taxi rides, and treatments have in common? All these expenses may be tax deductible as part of your health travel. Depending upon your income level and cost of treatment, some or most of your health journey can be itemized as a straight deduction from your adjusted gross income.
In brief, if you’re itemizing your deductions, and if IRS-authorized medical treatment and related expenses amount to more than 7.5 percent of your adjusted gross income, you’re allowed to deduct the remainder of those expenses, whether they were incurred in Toledo, Ohio, or Toledo, Spain.
For example, if your adjusted gross income is $90,000, then any allowed medical expense over $6,750 ($90,000 x 7.5%) becomes a straight deduction. Suppose, for example, that your medical trip cost you a total of $14,000 including treatment, travel, lodging, and, of course, a two-week surgeon-recommended stay in a five-star beachfront recuperation resort. For that trip, you could deduct $7,250 ($14,000 to $6,750) from your adjusted gross income.
Examples of typical tax-deductible items include:
- any treatment normally covered by a health insurance plan
- transportation expenses, including plane, train, boat or car travel
- lodging and in-treatment meals
- recovery hotels, surgical retreats, and recuperation resorts
Of course, your expenses must be directly related to your treatment, and many specific items are disallowed.
Be sure to save all your receipts. That’s often easier said than done in foreign lands. Hotel and treatment bills are sometimes not computer-generated overseas, and just try getting a receipt from a three-wheel taxi operator in New Delhi. Receipts or not, keep a detailed expense log, noting time, date, purpose, and amount paid. Ask for letters and other documentation from your in-country healthcare provider, particularly any recommendations made for outside lodging, special diets, and other services.
For more information, you can go straight to the source. Go to www.irs.gov, click on "individual," then search for "medical deductions." You can also call the IRS directly at 1 800 829-1040. Believe it or not, most IRS customer service representatives are friendly and competent, and if you are sufficiently persistent, you’ll eventually be put in touch with a medical tax specialist. As always with such matters, you should consult your tax advisor with questions or concerns.
Excerpted from Patients Beyond Borders World Edition
Last updated on 30 June 2011