SRS Tax deduction...

[Zenith]

Does anyone know if SRS is tax deductible as a medical expense in the US? I have been reading...nearest I can see it isn't officially but not enforced...may get audited and need to bring proof of post SRS???

Anyone know for sure?

Thanks...

[Niya W]

From what I've heard ,its taken on a case by case bias.

I've been told that you are more likely audit if it's done with in two years of your name change

[Zenith]

Thanks Niya...so I guess you takes your chances...

I looked into the reasons cited as to why it's not official...and :Angry3:

Any hope of a change with the current administration?

I mean I'll talk to a tx attourney for sure...but there is some hope here...it also looks like you can withdrawl funds on an IRA penalty free if your medical expenses are more than 7.5% of income? Does that sound right to people?

Again...I know no one can say for sure here...but this is giving some huge hope here on my timetable...:daydreaming:

[joanlynn28]

I have asked my tax preparer about this and she told me she isn't sure but will check into it. There are some "cosmetic surgeries" that are deductable. Also my tax person also has another client that is transgendered and she told me she thinks that it was deductable. Either way I will find out when it comes to filing my taxes for this year.

[Zenith]

I have asked my tax preparer about this and she told me she isn't sure but will check into it....Either way I will find out when it comes to filing my taxes for this year.

Let us know what you find out hun...at any rate vigorously prosecuting someone who doesn't make much and takes just the SRS deduction with full psych eval...seems unlikely under the current political climate...

I'm enjoy living in my fantasy world just a bit longer here...:straightface:

[RADER]

Defenitly check with a tax rep. Mabe 2 to get a 2nd oppinion. You know the
IRE, if they can goof anything up, they will.

[Karen564]

I dont know for sure, but I think it's all just goes under the general medical expenses, so I really doubt that they actually dig that deep into it as long as it's not way over a 100K..
It wouldn't matter to me either way, deductible or not, it definitely would Not stop me from getting it done anyways..LOL

[Zenith]

...It wouldn't matter to me either way, deductible or not, it definitely would Not stop me from getting it done anyways..LOL

Thanks hun...it won't stop me either...but it could make a huge difference in my timetable...I don't make much but if I could pull it out of an IRA without taxes or penalty...could be possible shortly after my RLE...

Saving for it would take much longer...and I can't make more without jeopardizing my education...

[Karen564]

Your so thrifty sis, I love the way your thinking...:hugs:
So looking for tax loop holes are we now....Hmmmmmm, when it comes to the IRA accounts, I think that's a totally different matter, just dont know of a way around the tax & penalty if you take an early withdrawal..

The system is designed to only help the extreme poor & the rich, if your stuck in between, your screwed..:devil:

[Zenith]

Hey Karen...I'm thinking number 3 here...

http://beginnersinvest.about.com/cs/iras/a/aairafees.htm

[Karen564]

Your so smart!!!, :) it might just work.. but of course it will take a good CPA to tell you that for sure..

[MJ]

why not try to get it done in canada ..as your out of the country you might get some tax back ?

[Kimberly Marie Kelly]

the amount of the medical deduction was much higher than the previous years amount, or it is outside a normal range for your income level. The IRS programs know statistically if you make x amount of money that you will deduct y amount for medical, w amount for charitable deductions etc. and if these amounts are outside the statistical models they have , you have an Audit.

So just make sure when you take the monies out and do the surgery keep good records so the audit goes well. Many time the Audit is just asking for proof of the expenses etc and where the money came from.. Good luck with the surgery when you get it done..

Kimberly Marie Kelly :battingeyelashes:

[CharleneT]

Intriguing idea for sure ! Since the med expense would not be detailed on the return it seems likely that you would be ok -- unless audited. If they allow elective surgeries of any sort I would think it could pass muster. That might be the tricky part, electives may not be covered.

Good thinking Julie !!

[sandra-leigh]

In that link you posted, notice the limitation that is towards the bottom of the page:


There is one catch to these qualifying exemptions; the holder of an IRA is subject to a five year waiting period (measured in tax, not calendar, years). An investor could not, for example, deposit $3,000 in their IRA this year and withdrawal it next year penalty-free even if it would otherwise qualify as an exemption.

[Rachel A V]

My SRS was done last November and was advised against trying to get a deduction by my tax guy.

Having had run-ins with the IRS in the past. I took the advice and just sucked it up. Audits, penalties, interest are all bad words I don't want to hear again!

[GypsyKaren]

I'm no expert, but I don't know any posties who tried it, I know it never crossed my mind.

Karen :g2:

[Niya W]

I do know of two post ops that did get it .

[laurab323]

Ok, here is your expert tax advice....

The answer is........ it depends.

The only definitive yes's are therapy and hormones.

If it can be proven that the change was absolutely necessary (ie life threatening) then you could claim it. However, being justified and having to prove it in court are two different things.

Best example is the swimming pool. A swimming pool is not deductible by itself, however if it is prescribed by a doctor due to an injury or illness then it is deductible as a medical expense.

Your chances of audit are fairly high simply because the amount of medical expenses would exceed the typical limits for the income level. It would most likely trigger a letter audit which is asking for backup documentation of the expense.

Once you show the documentation for SRS, they would most likely initially deny the deduction at which point you would have to file suit or hire a professional to appeal.

Is it worth it? Probably not. Medical expenses are only deducted above 7.5% of your adjusted gross income. So if your adjusted gross income is $100,000 and you had $8,000 of medical expenses, you would only get to deduct $500. If you are in the 33% tax bracket that deduction would only save you $165 in tax.

Probably not worth the headache.

[Karen564]

Thanks Laura..:)

Spoken as a true professional..

Seeing the example, it's definitely not worth the aggravation..

[Sally24]

I was trying to see if my electrolysis would be payable under my MEDCAP program at work. The administrator of the program said that it used the same rules as IRS for deductions. He said that I could try to but that rulings on it were mixed. It's one of those "do you want to be agressive on your deductions" kind of thing. Decided that it wasn't worth messing with at all.