Tax Information

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Did you know that you can deduct on your income taxes expenses for special equipment installed in your home or for home improvements if they accommodate you. your spouse or a dependent's disability?

If the cost of permanent home improvements, such as the installation of an elevator or a stair glide increases the value of the property, it may be partially included as a medical expense. However, the cost of the improvement is reduced by the increase in the value of the property. The difference between the two can be deducted as a medical expense. If the value of your home is not increased, then the entire cost of the improvement can be taken as a medical expense deduction.

Don't overlook what to consider as a medical expense and don't overestimate your deductions! One tax payer attempted to deduct the entire cost of construction of a garage as a medical expense. The rationale was that he had a leg disability and was told to limit his walking. The garage cost $10,000 to build. An appraisal revealed that the garage added $4000 to the value of the house. The tax court allowed $6000 as a deductible medical expense, not $10,000 which he originally claimed. To document your deduction, have your home appraised before and after the alteration.

Certain improvements to your residence can usually be fully included as medical expenses. These improvements may include:

	constructing entrance or exit ramps
	widening doorways
	widening or modifying hall�ways
	installing railings, support bars, or other modifications
	lowering or modifying kitchen cabinets and equipment
	modifying fire alarms. smoke detectors, and other warning systems
	adding handrails or grab bars anywhere
	grading the ground to provide access

If you have any questions concerning capital improvements, obtain from your local IRS office a copy of IRS Publication 502, Medical and Dental Expenses, which contains additional information and examples. You can also click here to go to the official IRS site about Publication 502. Publication 502 also has additional information about upkeep and operating expenses that are deductible for these capital improvement items. as well as tax incentives for landlords who improve accessibility on rental property for people with disabilities.

Source: By Stanley Krozek, CPA, One Step Ahead - The Resource for Active, Healthy, Independent Living, Volume 3. #8, August 1996

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