Can I Deduct for Therapy on My Income Taxes?

By: Paul Reyes-Fournier

Figuring out your medical deductions can be a headache in itself.

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The Internal Revenue Service is not in the position to dictate medical treatment so its rules defer to medical professionals. Therapy expenses are deductible for any treatment deemed medically necessary. Likewise, nontraditional medical services are eligible as medical expenses as long as they are for actual illness.

Therapies Included as Medical Expenses

The Internal Revenue Service Publication 502 specifically says that you can include in medical expenses amounts you pay for therapy received as medical treatment. In this statement, they do not differential between physical therapy, occupational therapy or psychotherapy. These deductions also extend to spouses and qualifying dependents. You can also include transportation and car expenses if they are primarily for travel to and from medical appointments. Gas and oil for a car during the time that you are traveling to and from medical appointment would be included. Transportation expenses may include taxis, buses and ambulances.

Traditional and Nontraditional Medical Expenses

Traditional medical expenses include hospital visits and prescription drugs. They also include wrap-around services for alleviating symptoms of illness. Television equipment for the deaf or construction costs for rehabilitating a house for use by a wheelchair may be counted as medical expenses. Most people understand that medical expenses associated with a traditional medical practice are eligible for medical expense deductions. Nontraditional treatments are another matter. People often don't realize that the cost of their acupuncturist who helps relieve back pain from a herniated disk is also a deductible medical expense. Hypnosis for smoking cessation qualifies a medical deduction. Even special education for children with educational delays can be deducted as long as a doctor makes the recommendation.

Wellness Programs

The Internal Revenue Service makes a distinction between medically necessary treatments and wellness programs. Wellness programs are not deductible as medical expenses. This is a particularly important difference when discussing psychotherapy. For this form of therapy to be deductible as a medical expense, the therapy must be for a diagnosable issue. Hypnotherapy for weight loss because of obesity would qualify. Hypnotherapy for weight loss because you want to feel better about yourself would not.

How Much Can You Deduct?

The amount of medical expenses that is deductible is anything over 7.5 percent (rising to 10 percent in 2013) of your adjusted gross income. If you met with your therapist every week and paid $75 per session, the deduction amount is $75 times 52 weeks in a year or $3,900. If your annual gross income is $30,000, the base medical amount is $2,250. The actual deduction listed on the tax return would be $3,900 minus $2,250 or $1,650.

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About the Author

Paul Reyes-Fournier has served as the chief financial officer for social service organizations, churches and schools. In 2009, he created his own marketing firm, RF Media. Reyes-Fournier holds a B.S. in physics and an M.B.A.

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