It’s somehow appropriate that the IRS would release a private letter ruling regarding a double mastectomy in October (in case you’re not aware, it’s Breast Cancer Awareness month). Here are the facts:
Taxpayer had a double mastectomy. She later gave birth to a healthy baby. As a result of the mastectomy, she was not able to breastfeed her baby. To meet her baby’s nutritional needs, taxpayer bought infant formula. She then requested a ruling from the IRS to classify infant formula as a deductible medical expense on her tax return.
It’s worth noting that infant formula can be a significant expense. Estimates are all over the place but seem to settle in at about $40 per week for formula – or just over $2000 per year. If you require a special formula, such as Alimentum, you can easily double that estimate.
Generally, infant formula is not deductible as a medical expense. It’s nutrition and as far as the IRS is concerned, it’s no different than, say, an apple. That’s spelled out at section 262 of the Code which bars deductions for mere personal or living expenses.
However, section 213(d)(1)(A) of the Code allows you to claim an expense for “medical care” for amounts paid:
(A) for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body
“Medical care” may include special foods and beverages if they are prescribed to treat a specific illness and are in addition to your normal diet. But… And it’s a big but… If those special foods and beverages are consumed as substitutes for your normal diet, they aren’t deductible. This is why, for example, you can’t deduct your Jenny Craig meals (though certain diet program fees may be deductible).
So, using that criteria, the IRS found that, in this case, the infant formula was considered food and not a deductible medical expense as that term is defined under section 213.
Keep in mind that while private letter rulings are interesting in that they provide insight into where the IRS is going on a particular issue, they are not binding and are only applicable to the individual taxpayer. That said, do you think the IRS got this one right?
(Hat Tip: TaxProf Blog)
Taxpayer asks:
My husband and I have a 4 yr old daughter diagnosed with autism (higher functioning). We are considering enrolling her in a private preschool that has a program specifically designed to help children with autism, something the public school system cannot offer. The yearly tuition is $22,000. Can any of this be tax deductible?
Taxgirl says:
This is one of those questions that feels like it should be easy but it’s not. There are a couple of options and a few restrictions. So let’s take it in pieces…
Private school tuition is generally not deductible. However, private school tuition for grades below kindergarten (i.e. preschool and daycare) is deductible if it would otherwise qualify as childcare. So to the extent that the program would qualify as childcare, the preschool tuition would be deductible until she enters kindergarten.
For grades kindergarten and above, the tuition would be deductible to the extent that you could separate the education piece from the childcare piece. This would apply if you enroll her in a full day program (usually including before or after care), for example, when the educational component stops midday.
All of that said, you may be able to take a deduction for tuition as a medical expense, assuming that you itemize. I say may because there are restrictions. The IRS allows a deduction for medical expenses for “payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or treatment affecting any structure or function of the body.” In some cases, this may include tuition for special schools for children with special needs if the primary reason for the school is related to the medical condition. In other words, it can’t just be that the school would be a “better” school for your child or that the school offered an extra program or certain atmosphere that you thought would be beneficial. Additionally, a doctor must recommend that your child attend the school (be prepared to back this up).
So who qualifies? The IRS has traditionally allowed tuition as a medical deduction for children who are deaf, blind or have learning disabilities. In recent years, the IRS has also allowed medical deductions for educational programs for children suffering from depression, ADD and severe effects of substance abuse. The key is whether there’s an actual medical need by the child for the specific program.
Aides and tutors hired to assist special needs children may also be claimed as medical expenses (assuming, again, that they are medically necessary).
Keep in mind that to the extent that your insurance company covers the costs of any of these treatments, you may not deduct the portion which is covered or reimbursed to you.
I hope that helps!
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
Have a question? Ask the taxgirl! – Now on Facebook!
Taxpayer asks:
If I pay my son’s huge medical expenses can he deduct same as if he paid them himself?
Thanks for your reply.
Taxgirl says:
Sorry, no. Your son may not claim a deduction for medical expenses that he did not pay.
However, you might be able to claim a deduction for paying those expenses, depending upon the nature of your relationship with your son.
In addition to expense paid for your spouse, you may be able to claim medical expenses paid for your dependents. Dependents include your qualifying child and your qualifying relative.
A qualifying child is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild, niece) who lived with you for more than half of the year; did not provide over half of his or her own support for the year and at the end of the year was (a) under age 19; (b) under age 24 and a full-time student, or (c) permanently and totally disabled.
A qualifying relative is a bit more complicated. More or less, include all of the relationships as outlined for a qualifying child – but not otherwise considered a qualifying child – then add your immediate family (siblings and parents), steps and in-laws and then the catch all “any other person (other than your spouse) who lived with you all year as a member of your household if your relationship did not violate local law” (the last bit is clearly a nod at politics at play). With a few exceptions (kidnapping, for one), you must have provided at least half of that person’s support for the year. Remember, that person must not file as independent on his or her own tax return.
Assuming your son meets any of that criteria, you can claim expenses that you paid for his medical care as a deduction. If not, you’re just a good dad taking care of his son. And kudos for that!
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
Have a question? Ask the taxgirl! – Now on Facebook!
Taxpayer asks:
I have a weird question. My insurance doesn’t cover the cost of my birth control pills. Can I deduct them on my taxes? What about other forms of birth control, like condoms?
Thanks,
Taxgirl says:
Wow, I didn’t realize that there were any insurance companies left that didn’t offer coverage for birth control pills. But that said, yes, you can absolutely deduct the cost of birth control pills as a medical expense.
Keep in mind that to actually take advantage of the deduction, you need to itemize your deductions – if you file with the standard deduction, the deduction isn’t available. You report medical expenses on Schedule A of your form 1040. Unfortunately, there are some limits: medical expenses are only deductible to the extent that they exceed 7.5% of your adjusted gross income (AGI). This means if your AGI is $30,000, you’d have to rack up $2,250 in medical expenses before you can claim any of the expenses. For a list of what else might qualify, check out this prior post on medical expenses.
Almost anything that requires the services of a physician would qualify – IUD, Norplant, etc. Additionally, the costs of sterilization for women and vasectomies for men are deductible.
What you won’t see on that list are other non-prescription forms of birth control, like condoms. As a general rule, non-prescription drugs and medicines, as well as “personal use items”, are not deductible.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
Have a question? Ask the taxgirl! – Now on Facebook!
