Audit-Proofing Your Tax-Deductible Medical Expenses

SPW writes: It will be difficult to accrue tax-deductible medical expenses in 2013. The ceiling just rose an additional 2.5% of Adjusted Gross Income (AGI), bringing the percentage up to 10%. If you do cross this threshold, then you want to ensure your tax return is audit proof. Documentation is integral for claiming any of the 3 Major tax-deductible medical expenses below.

Nursing Home Costs as a Tax-Deductible Medical Expense

Later in life, claiming deductions on nursing home expenditures can help offset most of your income and save a significant percentage of your money. The cost of the nursing home – including meals and lodging – can be written down as an itemized deduction. If you are helping a parent or grandparent with their taxes, be sure to take advantage of the opportunity. But standing up to an audit would require documentation that will prove the nursing home is necessary primarily for medical reasons. It does not matter how obvious the need may be, the IRS will require physical proof.

Weight Loss Programs as a Tax-Deductible Medical Expense

Approximately 2/3 of the adults in the U.S. are either overweight or obese, making weight loss programs increasingly common. It is also generally accepted that weight gain can lead to hypertension, diabetes, and high cholesterol. With a physician’s documentation of need for weight loss, you can claim deductions for:

• Attendance at meetings and weight-loss groups
• Weight-loss programs
• Special gym fees associated with your weight-loss program
• Food costs – This is the most difficult category to prove and will only be deducted if the food a) alleviates/treats an illness; or b) is not part of a normal nutritional need.

Showing a picture is not enough for the IRS. You need to have a medical opinion outlining the need for weight loss, and the programs you are engaged in.

Medical Massage as a Tax-Deductible Medical Expense

If you throw out your back, your doctor will often suggest medical massage as a component of physical rehabilitation. But you need official documentation from the healthcare provider in order to claim the therapeutic treatment as a deduction. We suggest treatment from a medical office that offers massage, as opposed to a general spa. It will be much easier to convince the IRS the expense was for treatment and not for pleasure.