You can claim the cost of surgery as a medical expense on U.S. income tax

[Ravin]

I just discovered this yesterday.

http://www.hrc.org/resources/transgender-inclusive-benefits-taxability-of-related-medical-expenses

http://www.transequality.org/sites/default/files/docs/resources/IRS_Factsheet_2012.pdf

It's going to make it worthwhile for us to itemize our medical expenses on this year's taxes for sure!

DISCLAIMER: This is not legal advice, I'm not a tax attorney. Just peer-support information.

[Guest]

Wow thank you for sharing! I did not know about this!

[Guest DianeATL]

If I remember correctly, medical expenses are only deductible if they exceed a certain percentage of your adjusted gross income (I think 15-20%)  but a big item like surgery should meet that.

I need to research whether electrolysis can be included as part of the medical transition cost and be deductible. 

[VickySGV]

I could have told you about that one Ravin, I am a retired Tax Agent for a State income tax agency who was well trained in the U.S. Tax Court decision before I was OUT at work.  For mere mortals not in the professional tax field, do keep good records of your expenses for GCS as they mount up and use something other than a shoebox to keep receipts in for your Tax Professional to use for you.  You will not get EVERY expense taken off, since it is expenses ABOVE a percentage of your Gross Income.  I got about 60% of mine allowed in one year, and only about 20% in the second year after I had used my additional refund from year one to buy some hearing aids. 

[Guest DianeATL]

Vicky do you know whether electrolysis can be "medical?"

[Briana]

 

5 minutes ago, VickySGV said:

For mere mortals not in the professional tax field

Ms Vicky, why oh why are taxes so twisted and complicated??? 

[Carolyn Marie]

12 minutes ago, DianeATL said:

Vicky do you know whether electrolysis can be "medical?"

I've also read the Tax Court decision and analysis, and unless something has changed recently, the decision on TG related medical expenses does not apply to what is commonly considered to be cosmetic surgery or other procedures.  That includes BA, FFS and facial hair removal.  It can (and has been) argued that those are essential for our well being, too.  But no Tax Court has agreed, so far as I know. I'm sure someone will make the effort to get that changed at some point.

Carolyn Marie

[VickySGV]

7 minutes ago, DianeATL said:

Vicky do you know whether electrolysis can be "medical?"

The amount spent on the clearing of the "surgical site" per your surgeon's requirements can be added into the surgery costs which will be allowed.  Biggest thing on the other is that it would have to be an amount greater than 8% of your Adjusted Gross Income in the year you had it under medical orders to do so.  Few if any of us would get that high, and so it has not been an issue just yet.  BA and FFS are not directly allowed as medical expenses, but in some cases have been allowed as depreciable business assets over a five year period.  (Claimants for that have been professional entertainers.) 

3 minutes ago, Briana said:

 

Ms Vicky, why oh why are taxes so twisted and complicated??? 

Actually Briana, they are not all that complicated or twisted if you take time to do the arithmetic and follow calculation procedures and are not so scared that you become ill or use booze or drugs to prep for tax return filing.  YES even I need an adding machine at the least, and some paper with columns, or my Spread Sheet program on the computer, and even there patience is your friend.  IRS Publication 17 is actually a great "Taxes For Dummies" booklet that you can download for free.  I had my law books on line, but used Pub 17 and a state equivalent much more often.  Certainly, more tax dollars should be spent on education in the field of business arithmetic and people required to pass those classes in order to vote.  The financial return to both sides would be wonderful.

On another note for fun.  I know two girls who took tax preparation classes and went to work during a couple of Tax Seasons (Jan to April) and financed their GCS easily that way. 

[Charlize]

How about HRT?  I have to itemize every year.  Much of our income goes to medical expenses between my heart condition and my wife's MS.  My meds alone get us into that position but that is compounded by the cost of supplemental insurance that we certainly need.  Our health care system in the US is a mess.  Private enterprise and the profit motive do not provide the best service but at least we can deduct some of the cost.

 

Hugs,

 

Charlize

[VickySGV]

IRS Pub 17 only requires that a medicine be prescribed and legal to purchase in the U.S and your state.  It must be prescribed and not merely recommended OTC drugs. Prescribed meds are prescribed meds!! If the prescription has your name or your spouse or dependent family member on it you are good to go.  I just consulted the 2015 filing year copy of 17 for this info.

https://www.irs.gov/uac/about-publication-17

[Charlize]

Thanks Vicky.  I hate paying taxes!  I guess that's one very normal part of me.

 

Hugs,

 

Charlize

[Guest BobbiLee]

Ok Vicki, now you've gone and opened the can....LOL. what about Gender Therapy? 

Bobbi

[VickySGV]

9 minutes ago, BobbiLee said:

Ok Vicki, now you've gone and opened the can....LOL. what about Gender Therapy? 

Bobbi

Quote

From Pub 17  Medical care expenses must be primarily to alleviate or prevent a physical or mental defect or illness.  

Hope that helps.  They still need to be in excess of 10% of your Adjusted Gross Income.

[Guest BobbiLee]

Thanks!  Yeah, we have other expenses each year some times we make others not but thanks for the info!!

Bobbi

[MarcieMarie12]

BTW what about the laser/hair removal required for the surgery?

[VickySGV]

 

My answer for Electrolysis fits here, as well as Carolyn's earlier comment. 

On 9/9/2016 at 8:40 AM, VickySGV said:

The amount spent on the clearing of the "surgical site" per your surgeon's requirements can be added into the surgery costs which will be allowed. 

If it is part of the surgery needs of your surgeon and therefor part of the surgical procedure.  Is this in the surgical site is the qualifier. On your face or even lower legs and it will be a no no.

My caution on this one is that Laser is not considered permanent hair removal just yet, so be sure you doctor has approved it over electrolysis.

[VickySGV]

Please folks, I posted the link to IRS Publication 17 which is the general go-to for U.S. Taxpayers who are filing their own tax returns.  It is pretty specific as to what is a deductible medical expense and does mention some cosmetic procedures that are not allowable.  If you have your taxes prepared professionally, the preparer may see things a bit differently and so might an IRS or state auditor.  The big point is that you can point to legitimate health needs for the expense.  Tax auditors are not M.D.'s and do not pretend to be.  Don't be the one to initiate the TG issue, they will either have a good idea or they don't.  The fact that SSN <???> shows up with a changed name from two years ago gives the story.  If they leave it alone so should you.  Keep good financial records, or know where to get copies of the records if you misplace them.  The IRS has 3 years from the filing date of your returns to begin an audit or ask if you will waive the statute of limitations for auditing a return.  When and IF that happens do have the records ready to go and possibly go and contact an expert to go with you as an attorney or CPA.