Question

During 2019, Pigpen paid the following expenses for Piggy Sue (his daughter) and Papa Pig (his father) and himself:

Doctor bills for Papa Pig	$6,800
Prescription drugs for Piggy Sue, Papa Pig & Pigpen	1,430
Surgery for Piggy Sue	9,800
Insulin for Papa Pig	570
Nonprescription drugs for Pigpen, Piggy Sue & Papa Pig	1,140

Piggy Sue qualifies as Pigpen’s dependent, and Papa Pig would also qualify except that he received $12,500 of taxable income.

Piggy Sue’s psychiatrist recommended that Piggy Sue be sent to Swine Academy because of its small classes and specialized psychiatric treatment program that is needed to treat Piggy Sue’s illness. In 2019, Pigpen paid the following amounts to Swine Academy:

         Psychiatric treatment                 $6,400

         Tuition                                    5,900

         Room, board, misc. items          4,100

Papa Pig, who is a diabetic, moved into Pork Chop Village in March 2019. Papa Pig’s diabetes is controlled with medication. Pork Chop Village, an assisted living & nursing home facility, offers an active lifestyle for older adults. Papa Pig, who was bored living with Pigpen, is thoroughly enjoying all the many activities at Pork Chop Village. Pigpen paid the following amounts to Pork Chop Village on Papa Pig’s behalf:

         Medical care                             $ 3,300

         Meals                                      18,650

         Lodging                                     15,900

Pigpen has a filtration system installed in his home upon the recommendation of his physician during 2019. Pigpen has severe dust allergies. In connection with this installation, Pigpen pays the following amounts:

         Installation of filtration system (including cost of the system)          $8,525

         Increase in utility bills due to the filtration system                              495

         Appraisal cost                                                                             300

The filtration system is expected to last 8 years. The appraisal was to determine the value of Pigpen’s residence with and without the filtration system. The appraisal states the installation of the filtration system increased the value of Pigpen’s home by $6,350.

Ignoring the 10% floor, what is the total of Pigpen’s expenses that qualify for the medical expense deduction?

Answer 1

Medical expenses :

Medical expenses are the expenses incurred for diagnosis, cure, treatment or prevention of diseases. It also includes the expenses paid to physicians, surgeons and other medical practitioners. It also includes the costs of equipment and supplies needed for the treatment.

Expense of dependents and Spouse :

Medical expense paid for spouse can be included if they are married during the time of the medical treatment. Likewise, the medical expense of dependents can be included if they are dependents at the time of the medical treatment or payment of such expenses.

Medical expenses that cannot be included in the deduction :

1) Expenses for illegal drugs, illegal operations or treatments.

2) Expenses for hair transplant, cosmetic surgery unless if such expense is necessary to improve a deformity.

3) Expenses that are reimbursed by your flexible spending arrangement or by the insurance company.

4) Medicines that are not prescribed by the doctors I.e. prescription by a doctor is a prerequisite to claim such expenses. (exception : insulin). Medicines bought from other countries are also not included.

5) Expenses for : Swimming class, dancing class, Health club, Nursing home facilities, teeth whitening, weight loss program, personal use items (eg : toothbrush), nutritional supplements, maternity expenses and normal childcare expenses.

S.No	Particulars	Included in medical expense ($)	Amount not Included as medical expense ($)	Explanation
1)	Doctor bills for Papa	6,800		The expenses are eligible for deduction as they are qualified medical expenses as mentioned above.
2)	Prescription drugs	1,430
3)	Surgery for Piggy	9,800
4)	Insulin fo Papa	570
5)	Nonprescription drugs		1,140	Only doctor prescribed drugs can be claimed.
6)	Amount paid to Swine club		16,400	Assumed to be a "Health Club"
7)	Amount paid to Pork Chop		37,850	Nursing facilities are not eligible expenses.
8)	Filtration system		9,320	Filtration system is not a medical equipment.
	TOTAL	18,600	64,710