If you spend money diagnosing, treating, or managing an allergy or sensitivity, that may pay off come tax time. The IRS lets you deduct a variety of expenses related to health care -- much more than just visits to your allergist. The bad news? Unless your expenses run to several thousand dollars, you're usually better off taking the standard deduction.
If you pay for doctor visits for yourself, your spouse or your dependents -- including checkups and exams even if you feel healthy -- that's a legitimate deduction. Travel to the doctor's office is deductible too. IRS definition of medical practitioners specifically includes acupuncturists and Christian scientists. If you visit a holistic, homeopathic or other alternative practitioner, you need to prove the medical necessity before the IRS will accept the write-off.
Drugs and Diet
If your doctor writes you a prescription for a legal drug, you have a valid deduction. You cannot write off the costs of illegal drugs, or drugs imported illegally from other countries, even if an MD recommends you use them. There's also no deduction for non-prescription meds: When you buy an OTC anti-allergy medicine, you're out of luck. If you change your diet due to food allergies, your special food isn't usually deductible either.
If your allergist recommends you have the house cleaned to remove a sensitivity trigger, or that you install a new air-filtering system, you can deduct the cost. If you do it on your own initiative, with no medical recommendation, there's no write-off. The deduction is limited only to medical improvements: If your doctor recommends a new filter but you go ahead and add a new air-conditioner, you can only claim the cost of the filter. If the improvement adds to your home's value, subtract the gain in value from the cost of the improvement.
When figuring the deduction, exclude any expenses covered by insurance or other reimbursement. Your total medical bills have to be greater than 7.5 percent of your adjusted gross income before you can write them off. If your income is $200,000, for example, 7.5 percent of your AGI is $15,000: Subtract that amount from your expenses and whatever's left is deductible. If your expenses total $13,500, there's no write-off. Beginning in 2013, your medical bills will need to exceed 10 percent of your AGI in order to be deductible.
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