A Tax Fact from The Tax Institute at H&R Block

Do you need another reason to lose weight?  For the estimated 40 million Americans who do, thanks to an IRS ruling, the cost of their diet programs just may be deductible as a medical expense deduction.

For tax purposes, obesity is a disease in its own right.  More than one-third of U.S. adults between the ages of 20 and 74 are overweight, defined as having “a body mass index (BMI) or the ratio of weight to height, of 25 to 29.9.”  An estimated 27% of the same group is obese, meaning they have a BMI of 30 or greater. Over 34 percent of adults aged 20 years and older are obese, according to the National Center for Health Statistics.

So how can you determine if you are eligible to deduct your weight loss program? Let’s look at two examples:

Taxpayer A has been diagnosed by a physician as obese, but he does not have any other ailments. Taxpayer B is not obese, but he suffers from hypertension.

• Both taxpayers are directed by their physicians to lose weight
• They participate in weight-loss programs for which they pay initiation fees, as well as fees to attend periodic meetings
• They also purchase reduced-calorie diet foods as part of the weight loss program
• Their expenses are not reimbursed by insurance

The question
Are expenses for participation in a weight-loss program, and for purchase of diet food items, deductible as medical expenses?

The answer
A deduction for medical expenses is allowed for both taxpayers. IRS held that in the case of both individuals the primary purpose of participation in the weight-loss programs is to treat a disease.

The IRS referred to National Institutes of Health and the Food and Drug Administration guidelines in acknowledging obesity as a disease. Therefore, in the case of Taxpayer A, the fees for joining and attending the weight-loss program are deductible medical expenses. Although Taxpayer B is not obese, his weight loss was prescribed as a medical treatment to treat the hypertension. Thus, his fees for the weight loss program are also deductible.

An expense incurred merely to improve one’s general health, appearance and sense of well-being is not deductible, however.

What about the food? Expenses for purchasing reduced-calorie diet foods are not deductible as medical expenses even if they are part of the weight-loss program.

Health club fees. Recently, the IRS issued an explanation regarding the deductibility of a health club membership. IRS has stated that in some situations the membership fee may be deductible. The deduction will be based on several factors:

• Medical necessity of fitness activities (other than basic health and well being)
• Local proximity to the health club
• Activities available at the club
• Other services provided
• The ability to obtain exercise elsewhere without joining the club

Our recommendation: Taxpayers who want to claim weight loss program expenses as a medical expense should ask for a written note from their doctors specifying that they must lose weight either because they are obese or because they have an illness that is exacerbated by excess weight.

This Tax Fact is brought to you by The Tax Institute at H&R Block.

To view other helpful tax information or listen to our Tax Fact podcasts, visit www.digits.hrblock.com

As always . . . everyone’s tax situation is different, so be sure to consult a tax professional or financial advisor before making important financial decisions.

This Tax Fact is for educational purposes only and is not intended to be a substitute for seeking personalized, professional advice, nor is it intended to be used to avoid IRS penalties.