The February 2013 issue of Plastic Surgery Practice Magazine came out recently and features an article entitled “Is Plastic Surgery Really Tax Deductible”. I was interviewed for the article and provided a brief background on some of the governing rules.
Medically Necessary Versus Elective?
In the context of cosmetic surgery, the question does not really turn on the distinction between being a medical necessity or being an elective procedure. A different test applies. Under the Internal Revenue Code (“the Code”), a partial deduction is allowed for the expenses paid by a taxpayer for “medical care.”
However, the Code explicitly excludes cosmetic surgery from falling under the definition of medical care unless the surgery is one which can generally be considered corrective. The Code defines “cosmetic surgery” as a procedure which is directed at improving the patient’s appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease. For a procedure to be deductible, it must be necessary to ameliorate a deformity arising from or directly related to i) a congenital abnormality, ii) personal injury, or iii) a disfiguring disease.
“Thus, when a woman undergoes breast reconstructive surgery following a mastectomy, the reconstructive surgery, although cosmetic and elective, would be a deductible medical expense. However, a breast augmentation to simply improve one’s appearance would not be deductible,” Callister explains.
In addition, Callister says that there is precedent for deducting the costs of skin removal. Thus, when a patient loses a significant amount of weight, loose-hanging excess skin can be removed and be considered deductible if the skin mass interferes with the patient’s daily life or is prone to infection and disease. Again, as with most things, the exact facts and circumstances factor into this decision.