It May Be Hard to Claim Your Weight-Reduction Deduction
IRS rules on write-offs for weight loss could be restrictive
WEDNESDAY, April 3, 2002 (HealthDayNews) -- The new obesity deduction plan just approved as a tax write-off may be more difficult to take advantage of than actually losing weight. If you plan to claim that Ultra Slim Fast in your fridge as a write-off, think again.
A new ruling from the Internal Revenue Service, which now considers obesity a disease, gives heavy people more leeway on their returns. But the new rule speaks louder about what it won't cover -- dietetic foods like shakes and low-cal meal plans -- than what it permits. Also, you'd either have to spend a lot of out-of-pocket money or belong to a company's flexible benefits plan to take advantage of the break.
Under the previous tax law, obese Americans could deduct weight-loss treatments only if they'd been diagnosed with another condition, such as heart disease or diabetes. The new ruling "places weight-loss treatments for obesity as the same category for any other medical deduction," said Michelle Lamishaw, a spokeswoman for the tax agency.
An estimated 39 million Americans are obese, including about a quarter of all adults, according to the American Obesity Association, which lobbied the IRS for the ruling change. The condition costs $100 billion a year and claims at least 300,000 lives, according to the group.
The deduction takes effect this filing season and may be claimed on amended returns dating back to 1998. Since the agency hasn't defined what constitutes a legitimate weight-loss treatment, Lamishaw said those expenses will be determined by auditors on a case-by-case basis.
The deduction does not apply to foods, since the revenue agency believes everyone has to eat, Lamishaw said. Nor can merely overweight people claim the break. Obesity is determined by a ratio of height to weight known as body mass index, or BMI, and you'd better have a doctor's note if you don't want to be audited.
The ruling does cover items such as initiation fees in weight loss programs. And it may even include health club memberships and time spent with personal trainers, provided these expenses top 7.5 percent of a person's adjusted gross income.
In 1999, the last year for which figures were available, 5.9 million Americans, or about 4.6 percent of filers, claimed medical and dental expense deductions on their tax returns, Lamishaw said.
Karen Field, a tax expert at KPMG's Washington, D.C. office, said most people are unlikely to qualify for the 7.5 percent provision. However, the waistline deduction's real benefit may be for Americans whose employers offer flexible spending accounts. These programs allow workers to create a pre-tax pool of money -- typically between $3,000 and $5,000 a year -- from which they can draw qualified medical expenses like insurance co-payments and other items not covered by their health plans.
The key, Field said, is that if you want to take advantage of the deduction, make sure your doctor is explicit about what she wants you to do lose weight. "You'd want to work with your doctor and say, 'Will you prescribe a set of treatments, what I should do?,' rather than simply saying lose weight."
No matter how you try to claim weight-loss expenses, Field advised, some things aren't likely to pass an auditor's sniff test. Forget the home stair climber or treadmill, for example.
Lamishaw said the IRS doesn't know how many people will be eligible for the obesity break, or how much money it will cost the U.S. Treasury.
Chris Corcoran, a spokeswoman for Weight Watchers International in New York City, said her company urged its customers to push their legislators for the deduction after the IRS announced in 1999 that it would allow smokers to deduct the costs of cessation programs.
Although the ruling won't allow people to claim their Weight Watchers food, it should cover the price of weekly meetings. These can range from $9 to $14, depending on where a person lives, Corcoran said. And while it would take hundreds of meetings to qualify for the deduction, Corcoran argued that many obese people have other, much larger health expenses to help them meet the 7.5 percent threshold.
The deadline for filing this year is April 15th.
This government BMI calculator will help you see when a person is considered obese. However, remember that you will need your doctor to confirm your condition in order to deduct medical expenses from your taxes.