It starts out with a few sniffles and maybe a runny nose. By the time it progresses to a hacking cough, watery eyes or full-on allergy attack, a respiratory illness is nothing to sneeze at. Many people suffer with chronic allergies and other respiratory illnesses -- including heart- and lung-related problems -- that make breathing difficult, especially in warm climates. If an air conditioner helps alleviate your symptoms, the Internal Revenue Service will let you slash your tax bill with a deduction for the air conditioner. Certain conditions must be met, and you are generally limited in what you can claim.
Medical Deduction
The IRS allows a deduction for an air conditioning unit as long as it is paid for by you with after-tax, out-of-pocket dollars. The expense is not allowed simply for keeping a cooler place or for maintaining good health -- it must necessary for the treatment of health-related issues. It's also not enough to determine for yourself that the air conditioner helps your breathing. The IRS wants to know your equipment was prescribed by a doctor. Hang on to your medical records as well as receipts for the unit's cost. It can be partially deductible.
Limitations
All medical expenses, including the air conditioner, must exceed 7.5 percent of your adjusted gross income to be deductible. Check your AGI on line 37 of Form 1040 Schedule A. For example, if your AGI is $25,000, your expenses must exceed $1,875 before they are allowed. The good news is that you can write off many medical and dental expenses to reach this threshold. That includes prescriptions, glasses, medical mileage, dental work, health insurance premiums that you pay for that are not reimbursed and expenses for your spouse or other qualified dependents.
Additional Expenses
You may deduct expenses related to repairing, operating and maintaining the air conditioner. These include filters, servicing and electricity to run the equipment. Even if the unit itself does not qualify for a deduction, you may still be able to deduct its operating expenses. Keep copies of your utility bills and service contracts or invoices to help prove the added expense.
Considerations
If the air conditioner you've installed to alleviate your symptoms adds value to your property, you may only deduct the cost in excess of the increase in value. For example, your new equipment cost $8,000, but installing it increased the value of your home by $5,000. You may only include $3,000 of the cost of the unit toward your AGI threshold. The full amount of detachable, window-installed air conditioners or equipment that does not add value to your home can be applied toward your 7.5 percent threshold.
How to File
Include the air conditioner's expense for the tax year in which the unit was purchased or charged to a credit card. Add up your medical and dental expenses for the year, excluding anything that was reimbursed by your employer or health insurance. You must file Form 1040 and itemize your deductions. If you forgot to deduct your air conditioner in the year it would have been eligible, you may file Form 1040X for the year in which you should have claimed the deduction. You typically have three years from the date you filed your original return to file your amended return.
References
- Wiley Registered Tax Return Preparer Competency Exam Prep 2011; H & R Block
- J.K. Lasser's Your Income Tax 2011
- TurboTax: Medical Expenses Checklist
- Bankrate.com: Maximizing your Medical Deductions
- Bankrate.com: The Write-Off Diagnosis
- IRS: Publication 502, Medical and Dental Expenses
Resources
Writer Bio
Elle Smith has been an advertising professional for more than 25 years. Her work for ABC, CBS and Sony Pictures Television has appeared on radio, on air, in print and outdoors. In addition, Smith has more than 20 years experience in marketing, graphic arts, commercial photography and print production, and is a licensed real estate agent with property management certification in California.