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5 Answers

Tax deduction for medical tourism?

Asked by: pmitchem 951 views YA Discussion

I’m writing a paper on medical tourism, and I’d like some general advice about what is tax deductible and what isn’t, please. I haven’t really found much information other than “consult your tax professional.”

Let’s say I need to have a knee replacement, and I either have no insurance or my insurance has a really high deductible. I decide that I can go to another country (Thailand, India, etc.) and have my knee replaced for a fraction of what it would cost in the US.

I believe there’s some minimum I have to hit in order to deduct medical expenses, so say I can do that. What then would be deductible?

My flight to the foreign country and transportation to/from the hospital?
The actual surgery/medical care/hospital stay-room and board/medications?

Once I leave the hospital, I would need physical therapy as an outpatient. I think I could deduct the therapy and any medications, but what about lodging and meals during that time?

If I needed help to get around, and I wanted a friend to come with me, would any portion of that person’s trip be deductible?

Is there anything else that would be deductible? Are there any other tax advantages that might come into play?

I imagine if a person wanted cosmetic surgery that wouldn’t be deductible in the US, it wouldn’t be deductible elsewhere. The issue would probably also get more complicated for something like a cancer treatment that wasn’t available in the US. Does medical necessity factor in at all?

Thanks for your help!!
Thanks for the replies so far. I did look up IRS publication 502, but it says under transportation expenses you cannot include: “Travel for purely personal reasons to another city for an operation or other medical care.”

This is where I get confused… I could get my knee replaced in Kalamazoo, but I want to go to Kuala Lumpur because it’s cheaper. Is that deemed a personal reason, so it wouldn’t be deductible?

Maybe this is the simpler way to ask the question…if I hit the 7.5% of my AGI (had to look up what that meant!) in medical expenses, and I choose to have my knee replaced overseas because it’s cheaper, would the medical expenses incurred over there be just as deductible as those in the US? And would there be any reason from a tax standpoint for me not to choose going overseas for care?

I guess there’s a reason people are advised to consult their tax professional! : )

5 Answers

  1. the kid on Mar 26, 2012 Reply

    “The issue would probably also get more complicated for something like a cancer treatment that wasn’t available in the US. Does medical necessity factor in at all?” – if it was a valid therapy, it would be avalibale in the US.

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  2. cynic47 on Mar 26, 2012 Reply

    Your best initial source of information on this topic is IRS Publication 502, Medical and Dental Expenses (link below). There is an extensive list of things that can and cannot be deducted, including discussions of such topics as transportation and meals. Good luck with your paper!

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  3. chatsplas on Mar 26, 2012 Reply

    Shouldn’t be that difficult. . . .WHERE are you looking?
    Start with the source–IRS
    http://www.irs.gov Pub 502
    Floor for medical expenses is 7.5% of AGI, so only expenses ABOVE that are deductible
    Medical tourism can be a bit complicated. . . .
    Only amounts actually PAID in a year count for anything

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  4. Mark Richard Reeves Guidone, M.D. on Oct 13, 2013 Reply

    The costs, depending on where you go and who you use, should be tax deductible. The question of the plastic surgery or other surgery, treatment not available in the USA most likely will not be deductible due to reasons that pertain to FDA approval. The problem is that very few, almost no out of country providers uses a US tax id or other ID numbers required, that will enable you to claim the cost of your procedure. There are several border communities, Cd. Juarez/El Paso is the largest border community in the world and, because of this that there are a few providers (single digits) that understand the paperwork involved in providing you with the deductions that you require or are looking for. I am a physician with a network of between 300-600 physicians working in several hospitals and I have worked in Mexico for almost 30 years. Because I pay my taxes in the USA on my income as a Mexican physician I understand the paperwork you need, including bills and tax ID numbers that will enable you to claim the deductibles you want. As you are looking for a specific entity to only write about I don’t really know anyone that will take the time to explain and go over the nuances that your question poses. I could give you my site and or e-mail addresses but you are asking for someone to teach you about what has taken me 30 years to learn. I hope that I have provided you with the basics although the whole story, like any other story, is a lot more complicated. M. Richard R. Guidone, M.D
    PS: You are also looking at worldwide medical tourism and, because of this, your question is even more complex

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  5. Mark Richard Reeves Guidone, M.D. on Nov 09, 2013 Reply

    First of all you don’t have to travel far for a medical procedure. Next, you need to find a reputable physician or group, as well as a hospital. While I actually am a physician who has practiced for 30 years (in the largest border community in the world) on the Mexico/US border, the reason for medical tourism is based solely on the ability we have to save you money for any procedure. If you find someone who is capable of evaluating you, giving you an opinion about your procedure as well as the relative savings (I, for instance, can show you smaller, less expensive hospitals or the biggest and the best hospitals in this area that do not only compare with their US counterparts (they are better but 1/10 the cost) the savings should be your area of concentration as well as all of the alternatives available to you, where are they and how much can you save (this is important as you can decide if you really require luxury or a small, clean hospital with a great staff is enough, the luxury hospital can offer you a suite with two rooms and two bathrooms with room for your family to live in the hospital while you are there! I have yet to see this in the USA..
    About taxes, you will have an insurance deduction you will have to pay if you are insured and sometimes the procedure can be less (by the use of medical tourism) than your deduction paid to the Insurance company in the US. Also, as my CPA has explained, most medical procedures (not those considered to be elective) are able to be deducted as are the hospital, anesthesia, surgical costs) You need to be specific in order to receive specific answers. A CPA would be able to tell you all about this. The travel may also be deducted if you can show that this was a procedure that you required, medically. ASK FOR MEDICAL REPORTS THAT DEMONSTRATE THIS.
    All in all, this is a complex question that requires knowledge of your income, how much the procedure is as well as where it is and how you go about actually receiving treatment, what have you paid to date for your medical procedures…
    Are you retired, do you have insurance, is it valid in another country, are you going to travel to a destination thousands of miles away? Will you have to be hospitalized for a prolonged period of time or will you stay in a “hotel” to heal before you are able to travel again…
    Your question is multifaceted and requires an answer that takes all of these things into consideration. I personally, would use a CPA to answer all these questions. Medical considerations I can deal with as well as arranging for payment for any procedure, but I am not a tax law expert.

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