Is Laser Eye Surgery Tax Deductible?

It is possible to deduct the costs of laser eye surgery from your taxes, provided certain conditions are met. Medical expense deductions can help reduce your taxable income, but they are subject to specific rules established by the Internal Revenue Service (IRS). Understanding these guidelines, including what qualifies as a medical expense and how to calculate the deductible amount, is important for taxpayers considering such procedures.

Qualifying as a Medical Expense

The IRS defines medical expenses broadly as the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for treatments affecting any structure or function of the body. For an expense to qualify, its primary purpose must be for medical care, not general health improvement or cosmetic enhancement.

Laser eye surgery, such as LASIK, generally qualifies as a medical expense because it corrects defective vision and affects the eye’s function. It treats a medical condition, specifically a refractive error, which distinguishes it from purely cosmetic procedures. While many health insurance plans might not cover LASIK, the IRS recognizes it as a legitimate medical expense for tax purposes.

In contrast, cosmetic surgery is typically not deductible unless necessary to improve a deformity arising from a congenital abnormality, personal injury, or disfiguring disease. Procedures solely for aesthetic reasons, such as facelifts or hair transplants, are usually not considered medical expenses.

Calculating and Claiming the Deduction

If your laser eye surgery qualifies as a medical expense, you can deduct it as an itemized deduction on Schedule A (Form 1040) of your federal income tax return. However, you can only deduct the amount of your unreimbursed medical and dental expenses that exceeds 7.5% of your Adjusted Gross Income (AGI). This threshold applies to the total of all qualified medical expenses for the year.

To calculate your deductible amount, first, determine your AGI, found on Line 11 of Form 1040. Then, multiply your AGI by 7.5% to find your threshold amount. Only the portion of your total qualified medical expenses greater than this threshold is deductible. For example, if your AGI is $60,000, 7.5% of that is $4,500; if you had $7,000 in qualifying medical expenses, you could deduct $2,500 ($7,000 – $4,500).

You must choose between taking the standard deduction or itemizing your deductions. You should itemize only if your total itemized deductions, including medical expenses, state and local taxes, mortgage interest, and charitable contributions, exceed your standard deduction amount. If your total itemized deductions are less than the standard deduction, you will typically receive a greater tax benefit by taking the standard deduction.

Required Documentation for Medical Expenses

Maintaining thorough and accurate records for all medical expenses, including laser eye surgery, is important. While you do not send these documents with your tax return, you must keep them with your tax records for several years in case the IRS requests them for review or audit. This documentation serves as proof of your expenses and their medical necessity.

Essential documentation includes detailed receipts or invoices from healthcare providers that clearly show the nature and purpose of the medical services or supplies received. These records should indicate who received the care, the name and address of the medical provider, and the date and amount of each payment.

Proof of payment, such as canceled checks, credit card statements, or bank statements, should also be retained. This verifies that you actually paid the expenses you are claiming. Organizing these records by year and type of expense can simplify the process of calculating your deduction and substantiating it if required.