Can You Write Off a Hot Tub for Medical Reasons?

The Internal Revenue Service (IRS) allows taxpayers to deduct certain amounts paid for medical care for themselves, their spouse, and their dependents. These expenses generally include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. This broad definition can sometimes extend to equipment and improvements made to a home if they are primarily for medical purposes.

Determining Eligibility for Deduction

For a hot tub to be considered a deductible medical expense, its primary purpose must be for medical care, not for general health, recreation, or personal enjoyment. This means the hot tub must directly address a specific medical condition.

A physician’s prescription or recommendation is generally required to substantiate the medical necessity of the hot tub. This document should clearly state the medical condition for which the hot tub is prescribed and how it will alleviate or treat that condition. Without such a recommendation, it becomes challenging to prove that the hot tub’s purpose is primarily medical. The expense must be medically necessary, meaning it is required to treat a medical condition, rather than simply being beneficial for overall well-being.

For example, if a hot tub is recommended by a doctor to alleviate chronic pain from a specific diagnosed condition, it may meet the medical necessity criteria. However, if it is purchased simply for stress relief or relaxation without a specific medical diagnosis and prescription, it would not qualify.

Understanding Deductible Hot Tub Expenses

The cost of the hot tub itself can be deductible, along with expenses for its installation. If the installation of the hot tub constitutes a permanent improvement to your home, a special rule applies for capital expenses.

For capital expenses that increase the value of your home, only the amount by which the cost of the improvement exceeds the increase in the home’s value is deductible. For example, if a hot tub costs $10,000 to purchase and install, but it increases your home’s value by $6,000, then only $4,000 of the expense would be deductible.

Beyond the initial purchase and installation, ongoing operating and maintenance costs directly related to the medical use of the hot tub can also be deductible. These expenses might include electricity, water treatment chemicals, and necessary repairs. If the hot tub is used for both medical and personal enjoyment, only the portion of the expenses attributable to its medical use can be deducted. Taxpayers must reasonably allocate these costs. For instance, if the hot tub is used 70% of the time for medically prescribed hydrotherapy and 30% for general relaxation, only 70% of the qualifying operating and maintenance costs would be deductible.

Necessary Documentation for Your Claim

To support a medical expense deduction for a hot tub, thorough documentation is essential. A detailed, written prescription or a letter of medical necessity from a physician is paramount. It should explain why the hot tub is medically necessary.

Financial records are also required to substantiate the costs incurred. This includes receipts for the purchase price of the hot tub, all installation expenses, and ongoing operating and maintenance costs such as utility bills, chemical purchases, and repair invoices.

If the hot tub installation is considered a capital expense that increases your home’s value, you will need evidence to determine the increase in value. This might involve appraisals of your home before and after the hot tub installation, or other professional assessments. This documentation is crucial for calculating the deductible portion of the capital expense.

If the hot tub is used for both medical and personal purposes, maintaining a detailed log of medical use can help justify the allocation of expenses. This log could record dates, times, and duration of medical treatments. Keeping all these documents organized and readily accessible is important, as the IRS may request them to verify your claim.

Claiming Your Medical Deduction

Medical expenses, including those for a hot tub, are claimed as an itemized deduction on Schedule A (Form 1040), Itemized Deductions. To claim these expenses, taxpayers must choose to itemize their deductions rather than taking the standard deduction. The total of all itemized deductions must exceed the standard deduction amount for itemizing to be beneficial.

There is a specific Adjusted Gross Income (AGI) limitation for medical expense deductions. Only the amount of qualifying medical expenses that exceeds 7.5% of your AGI is deductible.

For example, if your AGI is $50,000, you can only deduct the medical expenses that are more than $3,750 ($50,000 x 0.075). If your total qualifying medical expenses are $4,000, then only $250 ($4,000 – $3,750) would be deductible. If you had to adjust the cost of the hot tub due to it being a capital expense that increased your home’s value, the final calculated deductible amount after this adjustment is what you would include in your total medical expenses. This process ensures that only the medically attributable portion of the expense, net of any home value increase, is considered for the deduction.