Medical Travel: Strict rules on deductions

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The law makes it difficult to deduct medical expenses not covered by insurance or otherwise satisfied. Those expenditures are allowable only to the extent that their total in any one year exceeds 7.5 percent of adjusted gross income.

Assuming you incur costs that surpass the 7.5 percent threshold, an often-overlooked outlay begins as soon as you leave home. Your deductibles include travel for medical reasons to and from doctors, hospitals and the like. When you travel to and from your treatments by planes, trains, buses or taxis, just make sure to keep track of your fares and claim them as medical expenses. For use of your car, claim a standard mileage rate, with a separate deduction for parking fees and bridge or highway tolls. The standard rate is 18 cents per mile for 2006.

Medical travel does not include the cost of driving to work when a person is unable to use public transportation because of an illness or disability. For instance, the IRS ruled that cab fares required to transport a physically disabled person to and from work are nondeductible.

But the agency does not always have its way. Consider the unusual case of Mary Bordas, whose face was disfigured when she was thrown through her windshield in an auto accident. Mary underwent 14 plastic surgery operations and her facial injuries affected her mental condition. Her doctor advised against using public transportation, where she would be exposed to curious stares. He also insisted that she drive an auto to visit friends as therapy for her mental condition. Therefore, Mary bought a new Chrysler that she drove extensively for social purposes, as well as between her home and her doctor’s office.

The tax collectors tried to limit her medical transportation deduction to driving to and from medical appointments. But she challenged the feds in the United States Tax Court and won a partial victory. The court gave its blessing to a deduction for “all the driving she did to alleviate her mental condition.” But there the court drew the line. It refused to allow any deduction for the actual cost of the car.

Yet another Tax Court case involved Leon Altman, a Los Angeles surgeon who suffered from pulmonary emphysema. Dr. Altman learned the expensive way that you can go just so far in deducting doctor-ordered driving. The way Altman told it to the judge, his physician advised him to play golf. But smog and pollutants within the city’s confines made it impossible for him to get the recommended exercise of walking and swinging a golf club, thereby forcing him to drive 56 miles from Los Angeles to reach the clean air of his country club for three or four rounds each week. The IRS threw out his medical deductions of several thousand dollars for the long drives between his home and the golf course, for a golf cart and for playing fees.

An unsympathetic judge also declared him out of bounds. So what if the smog problem did make outside exercise impossible for Altman. It still was stretching things to claim that a person needed a golf course to engage in the exercise of walking—or swinging a golf club, for that matter. By way of an additional unkind cut, his honor characterized golf as the “classic example of a personal rather than a medical activity.”   

Julian Block is a nationally recognized tax expert. He may be reached at www.julianblocktaxexpert.com.