USA: Tax Write Off for Cosmetic LL?

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Sensible decision, good stuff!

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Looks like the links that Puru posted are no longer current, so here's copy/pasting from the law about what you can and can't try to itemize as a US tax deduction, from IRS Publication 502. Underlined emphasis mine.

QuoteCosmetic Surgery

Generally, you can't include in medical expenses the amount you pay for cosmetic surgery. This includes any procedure that is directed at improving the patient's appearance and doesn't meaningfully promote the proper function of the body or prevent or treat illness or disease. You generally can't include in medical expenses the amount you pay for procedures such as face lifts, hair transplants, hair removal (electrolysis), and liposuction.

You can include in medical expenses the amount you pay for cosmetic surgery if it is necessary to improve a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease.

Hospital Services

You can include in medical expenses amounts you pay for the cost of inpatient care at a hospital or similar institution if a principal reason for being there is to receive medical care. This includes amounts paid for meals and lodging.

Lodging

You can include in medical expenses the cost of meals and lodging at a hospital or similar institution if a principal reason for being there is to receive medical care. [...]

You may be able to include in medical expenses the cost of lodging not provided in a hospital or similar institution. You can include the cost of such lodging while away from home if all of the following requirements are met.

• The lodging is primarily for and essential to medical care.
• The medical care is provided by a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital.
  
• The lodging isn't lavish or extravagant under the circumstances.
• There is no significant element of personal pleasure, recreation, or vacation in the travel away from home.

The amount you include in medical expenses for lodging can't be more than $50 for each night for each person. You can include lodging for a person traveling with the person receiving the medical care. For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. Meals aren't included.

Don't include the cost of lodging while away from home for medical treatment if that treatment isn't received from a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital or if that lodging isn't primarily for or essential to the medical care received.

Trips

You can include in medical expenses amounts you pay for transportation to another city if the trip is primarily for, and essential to, receiving medical services. You may be able to include up to $50 for each night for each person. You can include lodging for a person traveling with the person receiving the medical care. For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. Meals aren't included.

Transportation
You can include in medical expenses amounts paid for transportation primarily for, and essential to, medical care.

You can include:
 

• Bus, taxi, train, or plane fares or ambulance service;
• Transportation expenses of a parent who must go with a child who needs medical care;
• Transportation expenses of a nurse or other person who can give injections, medications, or other treatment required by a patient who is traveling to get medical care and is unable to travel alone

Crutches
You can include in medical expenses the amount you pay to buy or rent crutches.

Wheelchair
You can include in medical expenses the amounts you pay for a wheelchair used for the relief of a sickness or disability. The cost of operating and maintaining the wheelchair is also a medical expense.

Recordkeeping. You should keep records of your medical and dental expenses to support your deduction. Don't send these records with your paper return.

Now based solely on this text above from the IRS, I think it's risky to claim a tax deduction for lodging that was for cosmetic surgery. Yea, the "principal reason" you used the lodging was "to receive medical care", but that medical care was following a cosmetic procedure, and you can't include cosmetic procedures in your medical expenses. Imagine you're audited: "Yes Mr. IRS, I paid them to break my legs and make them longer, but after that I needed physical therapy, and I needed a hotel nearby too..."

Quote from: Purushrottam on April 12, 2018, 03:59:51 AMI also have the reference # from my phone call to the IRS where I asked about the ambiguities (whether or not the associated medical expenses of LL are covered).

Puru, when you called the IRS, did you explicitly tell the agent that LL was a cosmetic procedure?

Also, did you write off trip-related expenses too, or just lodging?

And how about the removal surgery? That itself is the direct result of a cosmetic procedure, but on the other hand, can be classified as "removal of painful hardware" (diagnosis code 996.78) or "deep implant removal" (CPT code 20680). I'm not entirely clear about the first diagnosis code; I've heard about the latter, but the latter doesn't sound as medically necessary.

Quote from: Purushrottam on April 11, 2018, 07:55:27 PMI called the billing department. They can't itemize the $90,000 cost into Surgery, X Rays, Physical Therapy, etc.

That sucks, but - there's a number of included PT sessions in the $90k cost. The Stature Lengthening FAQ mentions QuoteHow often will I have physical therapy?
Daily, 5 days a week for the entire distraction phase. (6 days a week may be available for an additional
payment of $225 per session-please inquire regarding this)

Physical Therapy includes:
• Daily (5 days per week) one hour of physical therapy at the Paley Institute outpatient rehab center (there is no PT on weekends); up to 12 weeks femurs and tibias (surcharge after 12 weeks); femur plus tibia overlapped up to 14 (surcharge after 14 weeks).

I remember I had 70 included sessions indeed, and did two extras, for which I paid $300 each in June 2018.

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Just find a medical condition pre-op that was fixed post-op.
Could be your posture, reduce chances of scoliosis, etc.

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Quote from: OverrideYourGenetics on November 15, 2019, 05:58:37 AM
Puru, when you called the IRS, did you explicitly tell the agent that LL was a cosmetic procedure?

I don't remember. I think I did.

Quote from: OverrideYourGenetics on November 15, 2019, 05:58:37 AM
Also, did you write off trip-related expenses too, or just lodging?

The trip related expenses were insignificant compared to lodging + PT

Quote from: OverrideYourGenetics on November 15, 2019, 05:58:37 AM
And how about the removal surgery?

I almost forgot. Thanks for reminding me. I think I can classify it as "removal of  painful hardware".

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Hey Puru, any updates on your deducting LL expenses from your taxes?

I did a simulation in TurboTax, and if you declare the surgery itself as a deductible medical expense (e.g. if you have the appropriate diagnosis that's not just cosmetic), you can get back tens of thousands of dollars (!).

For example, for a tech salary of $120k/yr and living in California,
1) you don't pay ANY CA state tax on the income (sick pay) you've realized during the recovery. In my simulation, that was about $9k.
2) Then you get back federal taxes that were withheld from your paychecks. In my case that was $20k (!).

This happens because deducting the cost of the surgery ($90k - $175k) from your income reduces your remaining (taxable) income to almost zero.

The key is to have a diagnosis that necessitates the surgery not just for cosmetic reasons. Any updates on that? "Short stature due to endocrine disorder" might be one, or just "Short stature (child)", but this should be (re)checked with a tax professional. Did the IRS person you spoke with address deducting the surgery itself, if you had other issues, as Montreal172 suggested, e.g. limb length discrepancy?

Either way - because you've paid for lodging alone between $4500 ($50/night x 90 nights), and $9000 if a caretaker stayed with you the whole time, you're getting close to the minimum percentage of your AGI above which you can itemize medical expenses. Then you can deduct ANY OTHER MEDICAL EXPENSES you had in that year!

Anyway, would love to hear an update about deducting the removal surgery costs.

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While the benefits are great, I feel like this is the exact kind of thing that would get audited

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Quote from: BelowTheMean on October 01, 2020, 04:45:56 PMWhile the benefits are great, I feel like this is the exact kind of thing that would get audited

Probably... though nowhere in my consolidated 300-page medical report from all 3 surgeries is the word "cosmetic" mentioned.

There's endocrine short stature, short stature disorder, constitutional short stature, limb length discrepancy then various other diagnoses during the recovery (abnormal gait, inflexibility etc.). I think it would take some non-trivial knowledge of this rare procedure and various associate medical details (e.g. what limb length discrepancy is pathological?) for a tax auditor to decide this is not deductible. I'll have to check with a tax preparer, and finding one with knowledge of somewhat similar precedents won't be easy. And I think they'd be heavily biased by however I present the problem. If I send them my medical report and ask, "Is this deductible", the answer will probably be Yes. If I say "I had COSMETIC leg lengthening, here's my medical report", they might say No.

In any case, I think the worst outcome is that the federal refund is reduced; the CA state refund should still be warranted, because it was due to sick pay, which was approved by my work's sick pay provider. The lodging costs should still be deductible (see Puru's post about him talking to an IRS employee), as well as various other expenses (e.g. PT). One extra PT session cost me $300, and the Paley Institute surgery package included 70 PT sessions, so that's $21k of value.

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Honest thoughts: America is a great country. There is no other country in the world which would let you safely lengthen your limbs. Precice and Stryde were invented here. They are manufactured here. The country has nurtured some of the best talent. Notice how so many expert LL surgeons were born outside of the USA. They came here to fulfil their dreams. And so many of us have been able to fulfil our dreams. Something that was so surreal to imagine is now possible. Quite safely under the care of American surgeons and hospital systems. Why not pay up some extra tax as gratitude? Especially if you're well off or foresee making good money.

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In that case u wud donate to the surgeon instead of contributing to the military industrial complex

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Quote from: ink on October 02, 2020, 09:15:09 AMHonest thoughts: America is a great country. There is no other country in the world which would let you safely lengthen your limbs. Precice and Stryde were invented here. They are manufactured here. The country has nurtured some of the best talent. Notice how so many expert LL surgeons were born outside of the USA. They came here to fulfil their dreams. And so many of us have been able to fulfil our dreams. Something that was so surreal to imagine is now possible. Quite safely under the care of American surgeons and hospital systems. Why not pay up some extra tax as gratitude? Especially if you're well off or foresee making good money.

Lmao what kind of first post is this? Are you some kind of shill for the IRS? Taxation is theft, regardless of what country you live in. Just because the government can take your money at gunpoint and then blow it on stupid   doesn't mean that's the way things should be. Considering how many rich people pay almost nothing in taxes, I don't think there are any moral arguments against deducing CLL from your taxes. It's not about whether you should or shouldn't do it, it's about whether or not you can get away with it.