While some expenses clearly qualify as medical deductions for tax purposes, others are not as obvious. Health related expenses that qualify for tax purposes can include more than you might imagine. Anytime you have a significant change in health, you may want to review what the IRS does and does not allow for deductions.

For tax purposes, deductible health and medical expenses include expenses incurred for the diagnosis, treatment and prevention of disease. Deductions for direct medical care, as well as equipment and supplies, are allowable. Transportation, caregiver expenses and home modifications are also allowed as deductions in some cases.

All medical expenses greater than 7.5% of your adjusted gross income may be deducted. You can calculate this by multiplying your adjusted gross income by 7.5%, and then subtracting this amount from your medical expenses.

Example: George has an adjusted gross income of $100,000 and $8,000 dollars in medical
expenses. By multiplying .075 x $100,000, he learns that he can only deduct
expenses in excess of $7,500. He must deduct this amount from the $8,000, which
leaves him with $500 in deductions for health expenses.

Generally, you can deduct medical expenses for yourself, your spouse and your dependents. Medical expenses of a spouse may be deducted if you were married either when the healthcare occurred or when the medical bill was paid. For other dependents, you must have paid at least half of their expenses for the calendar year.

Dependents can be children or relatives. In addition to your own biological children, 'children' includes siblings, stepchildren, foster children, adopted children, and any of their descendants. At the end of the tax year, the child must have been under age 19, under age 24 and a full-time student, or permanently and totally disabled. They must also have lived with you for more than half of the calendar year.

For you to deduct the expenses of a relative, you must have provided over half their support for the calendar year. Allowable relatives include children over 19, siblings and stepsiblings, parents and stepparents. Other relatives allowed are detailed in IRS Publication 502.

In addition to traditional medical expenses, you can deduct:

• Braille books and magazines
• Vehicle accommodations for a person with a disability
• Chiropractor
• Disabled dependent care expenses
• Fertility enhancement
• Guide dog or other animal
• Medical insurance and HMO premiums
• Lead-based paint removal
• Advance payments for lifetime care
• Lodging and meals if the main reason is to get medical care
• Medical conferences concerning the chronic illness of immediate family member
• Special home for mentally retarded
• Special education for children with learning disabilities
• Stop-smoking programs
• Cost of special television and telephone equipment for the hearing impaired
• Weight-loss program expenses if for health, not including food

Nursing services can be deducted. Generally, only the amount spent for actual nursing duties can be deducted. These include tasks directly related to the person's medical condition, and not for time spent providing personal and household services. However, if the individual is unable to perform at least 2 activities of daily living independently, or needs continuous supervision for safety, the full amount is deductible. Activities of daily living include feeding, bathing, toileting, continence and transferring.

Example: Jane is able to perform all activities of daily living independently. However,
she requires IV antibiotics and bandage changes. She has hired someone to
provide these services, as well as cooking dinner and driving her on errands.
Since the time required for the IV antibiotics and bandage changes is 1 hour a
day, she can deduct that portion of the assistant's salary.

Example: Mary is unable to feed herself and needs assistance with bathing. She may
deduct the full amount of the cost to have someone in her home who assists
with housekeeping and cooking.

Example: Mark has Alzheimer's, and tends to forget to eat, and wanders off. He
requires constant supervision for his safety. He may deduct the full cost of
having an aide.

The cost of modifying a home for the special needs of you or your dependent can be deducted to a certain extent. If the modification increases the value of your home, such as an elevator, you can only deduct the difference between the cost and the increased value to your home.

Example: John, a paraplegic, installs an elevator into his home. The cost is
$20,000. The elevator increases the value of the home by $15,000. John can
deduct $5000 from his taxes.

Certain modifications do not increase the value of a home and can be fully deducted. These include:

• Constructing entrance or exit ramps
• Widening doorways
• Installing railings or support bars
• Lowering or modifying kitchen cabinets and equipment
• Moving or modifying electrical outlets, smoke alarms and other warning systems
• Installing porch lifts
• Modifying stairways and hardware on doors
• Grading the ground to provide access to the residence.

Generally, any item or service that is illegal, or purchased for general health or appearance is not deductible. This includes:

• Well child care
• Cosmetic surgery
• Health club dues
• Household help
• Funeral Expenses
• Maternity Clothes
• Nonprescription drugs and nutritional supplements
• Teeth whitening
• Weight-Loss program not related to a medical condition
• Illegal operations and substances

Additionally, you cannot deduct expenses for which you are reimbursed. This includes reimbursements from insurance, workers compensation and personal injury claims. Also, expenses paid from money in a Health Savings Account cannot be deducted.

IRS rules are highly complex, and it is impossible to detail every situation. If your question is not answered by IRS Publication 502, you can call the IRS at 1-800-829-3676. Or, your can go to one of the many Taxpayer Assistance Centers. Extensive information is also available at www.irs.gov.