Tax consequences of transitioning (United States)

[JeanneF]

Jennifer's thread here (http://www.crossdressers.com/forums/showthread.php?t=44242) got me thinking...

I would assume that, while health insurance generally won't cover SRS, what about using an HSA (Healthcare Savings Account) to help to reduce the costs of transitioning? While obviously the actual SRS would be an eligible expense, what about something like FFS, which is cosmetic surgery but is specifically related to a medical condition? On a simliar note, if you didn't have an HSA, would the FFS be considered an Unreimbursed Medical Expense to the IRS?

Theoretically, this could lop off 25-35% of the cost of FFS (depending on your tax bracket), if you could get it past the taxman.

Unfortunately, I don't have any colleagues that I could ask this question of without raising a whole lot of more questions (like "why are you asking this"), so I was wondering if anyone had experience with this?

[joanlynn28]

I don't really know, but you can use a FSA to pay for OTC drugs and other things that health insurance doesn't . I mean if you can use FSA's to pay for things like aspirin and other medical items I don't think it really matters whether it is for a procedure that is medically necessary or cosmetic reasons. If you can use it to pay for things that your insurance does not why can't you use it for whatever medical reason you see fit. Of course if your medical expenses come close to 75% of your yearly income than you would not need a FSA. It is an option created for use normally healthy people to be able to create tax savings for expenses that don't qualifiy for deductions on your income tax form. Of course the best thing to do would be to go see and ask a tax professional who wuold be able to answer this question. Just my two cents worth.:2c:

[cindianna_jones]

Yes, yes, and yes.

Deduct all medical expenses! If you are getting a letter for your SRS, talk with your therapist about a similar letter covering any additional body work in general terms. Tell him/her that you need it so show justification to declare these expenses as medical necessity. This is only for the worst case scenario. The IRS won't challenge it. You'll likely never even need to pull that letter out of the file. As long as they see money going to a doctor and hostpital, they'll not even bat an eye. SO BY ALL MEANS, DO IT!

The electrolosys might be a little more difficult, but with a good letter from your therapist, I bet you could convince the gubbament of the medical need. If I were doing this all again, I wouldn't hesitate for a moment.

Now.. I don't work for any tax preparation company nor the IRS. But I read their bloody documents every year. You can understand them if you take the time. Tax preparation companies try to scare you into using their services. My advice is free and worth every penny!

Cindi


Jennifer's thread here (http://www.crossdressers.com/forums/showthread.php?t=44242) got me thinking...

I would assume that, while health insurance generally won't cover SRS, what about using an HSA (Healthcare Savings Account) to help to reduce the costs of transitioning? While obviously the actual SRS would be an eligible expense, what about something like FFS, which is cosmetic surgery but is specifically related to a medical condition? On a simliar note, if you didn't have an HSA, would the FFS be considered an Unreimbursed Medical Expense to the IRS?

Theoretically, this could lop off 25-35% of the cost of FFS (depending on your tax bracket), if you could get it past the taxman.

Unfortunately, I don't have any colleagues that I could ask this question of without raising a whole lot of more questions (like "why are you asking this"), so I was wondering if anyone had experience with this?

[janedoe311]

Because it is being seen as a "medical condition by some doctors (very few).

Can not hurt to get the doctor to write a letter, saying it is necessary for your well being and health.