Recent research suggests that more than 15.8 million instances of cosmetic surgery occurred in one year alone. Such a large amount of work based on a service often leads to people asking a critical question: “Can you deduct cosmetic surgery on taxes?”
In truth, you can sometimes deduct cosmetic surgery, but there are nuances to the process. Below, we explain the details behind this oft-misunderstood cosmetic procedure to help you understand which procedures are non-deductible and how to work out which medical conditions are likely to qualify instead.
Learn from IRS rules and case law to discover how to resolve this issue and put yourself in the best financial situation possible with tax write-offs.
Can You Deduct Cosmetic Surgery on Taxes?
Tax organizations define many cosmetic surgeries as “elective expenses”. When procedures are in this category, they are most often non-deductible unless they revolve around functional impairments. For example, tax return software company TurboTax only lists cosmetic surgery as a deduction if it’s to resolve a congenital deformity.
If you receive reconstructive surgery due to injury or disease, you may need to discuss the specifics with your accountant. Often, you may receive a combination of surgeries related to function and aesthetics. So, you should apply deductibles appropriately, and having explicit evidence that a procedure is necessary for your health can make all the difference.
However, even if an issue meets the above requirements, you can only claim unreimbursed medical and dental expenses when the total cost exceeds 7.5% of your adjusted gross income (AGI). For example, if you have an AGI of $50,000, only expenses above $3,750 are deductible.
For this reason, and to avoid difficulties with your tax return, it is vital that you get your calculations right, and you are likely to find that smaller expenses are unlikely to qualify.
It is also important to note that this rule only covers unreimbursed costs such as out-of-pocket expenses. So, insurance payments do not count towards this threshold.
What the IRS Says About Tax-Deductible Cosmetic Surgery
IRS Publication 502 outlines which medical or dental expenses you can deduct under federal law.The IRS has also created a clear list of items for public use to refer to when working out if you can claim different types of tax deductions. However, to many, it may be hard to parse if you want to work out the exact details of what meets the threshold.
The IRS guidelines for cosmetic expenses help taxpayers understand their recordkeeping and documentation needs. People can then ensure that they keep a detailed record of medical expenses, including:
- Receipts
- Invoices
- Doctor’s statements
- Medical records
- Financing records
Each of these could be very important when meeting the minimum thresholds for cosmetic surgery deductions. As such, do not throw away any correspondence until you are sure it will never be relevant later.
Busting Common Myths About Cosmetic Expenses
Myth: No cosmetic procedure is deductible.
Fact: In truth, some can be. Exceptions exist, for example, when the work is medically necessary to prevent a worse condition.
Myth: All appearance-enhancing surgeries are non-deductible.
Fact: Many procedures unrelated to “cosmetic surgery” can affect a person’s appearance. For example:
- Rhinoplasty to open the nasal passages
- Breast reconstruction following a mastectomy
- Corrective surgery for cleft lip or palate abnormalities
- Surgery for ptosis
- Aligning the jaw for an improved bite
Dispelling the above myths helps those who may choose to seek out this kind of surgery but are worried about the impact on their finances.
What Counts as Medically Necessary Treatments?
The nuances of the difference between the two types of surgery can cause significant confusion for many people. As mentioned above, if a procedure corrects a deformity or restores normal function, the IRS will often consider it valid. However, how does one prove this?
In general, the IRS tends to judge medical necessity based on whether a procedure:
- Prevents further complications in the patient’s life
- Improves the health outcome of the patient
- Alleviates symptoms that affect a patient’s life
These are not the only details, but the ones most likely to have a significant impact.
To prove medical necessity, you should ensure that you have a solid set of medical opinions that support this conclusion. Use as much documentation as you can to ensure you can respond to queries surrounding this, such as:
- Clinical assessments
- Diagnostic records
- Doctor’s notes or written statements
- Internal clinic communication
- Treatment plans or timelines
- Payment confirmations and receipts
If you can get a note from your clinician explicitly stating that the procedure is necessary, it is much more likely to have a significant impact on how the IRS considers your situation.
Some precedents exist that may help you establish that a procedure is not merely for aesthetic reasons. For example:
Exception 1: Hess v. Commissioner (1994)
In this court case, an entertainer was able to successfully argue that their extensive breast augmentations were a necessary expense for their working life, rather than an aesthetic adjustment they took personal satisfaction from. They were able to show that the procedure was a core part of her:
- Professional image
- Income generation efforts
- Business operations
- Success as an entertainer
She was also able to prove that, as the enhancements caused her significant personal discomfort, it would not make sense for them to be considered a personal preference.
Exception 2: O’Donnabhain v. Commissioner (2010)
O’Donnabhain claimed that hormone therapy and sex reassignment surgery were vital for treating their gender identity disorder. Alongside the physical changes, the court agreed that these treatments addressed and supplied significant psychological improvementsand resolved what they considered physical impairments.
The case reinforced the idea that medically necessary treatments could be deductible, even if commonly considered an aesthetic alteration.
Learn if You Meet the Threshold for Deductions
Can you deduct cosmetic surgery on taxes? Yes, but differentiating between purely cosmetic procedures and medically necessary surgery can be difficult. However, making that separation allows you to identify deductibility and ensure that you file every expense correctly.
Cosmetic surgery locations like Popp Cosmetic Surgery PC can help you with this process. Our staff can help you with the documentation you need before you discuss your situation with an accountant. So, contact us and request a consultation today to learn what we can do to help you realize physical and mental wellness
