IRS: Baby formula not deductible expense for double mastectomy mother.

http://www.taxgirl.com/infant-formula-not-a-medical-expense/


It’s somehow appropriate that the IRS would release a private letter ruling regarding a double mastectomy in October (in case you’re not aware, it’s Breast Cancer Awareness month). Here are the facts:

Taxpayer had a double mastectomy. She later gave birth to a healthy baby. As a result of the mastectomy, she was not able to breastfeed her baby. To meet her baby’s nutritional needs, taxpayer bought infant formula. She then requested a ruling from the IRS to classify infant formula as a deductible medical expense on her tax return.

It’s worth noting that infant formula can be a significant expense. Estimates are all over the place but seem to settle in at about $40 per week for formula – or just over $2000 per year. If you require a special formula, such as Alimentum, you can easily double that estimate.

Generally, infant formula is not deductible as a medical expense. It’s nutrition and as far as the IRS is concerned, it’s no different than, say, an apple. That’s spelled out at section 262 of the Code which bars deductions for mere personal or living expenses.

:wtf: :popcorn: :wtf: :popcorn:

can be done like the insurance company who was shamed into covering the infant it had initially denied due to his pre-existing condition of being overweight.

This is so WRONG. I know the insurance companies are against us because they're for-profit enterprises, but our own government?

Food is just not a deductible expense, whether it's "special" food, part of some diet plan or metabolic need, or whatever reason. All humans need food, therefore, it's not some sort of drug or addition to a regular diet that requires that some people take it, and others do not need it.

Perhaps if it were considered absolutely necessary that human infants need breast milk, there might be a case here, but since a large number of babies regularly consume formula, it's just not gonna fly. This private letter ruling was not out of the ordinary as to what I've observed from past practices of the IRS.

I was trying to think of a circumstance in which food would be a deductible expense, and even in the most extreme case, couldn't come up with one: not elderly people who must drink Ensure; not people who must eat gluten-free foods because of a serious intolerance. It would be a floodgate opening: I could deduct the duck fat I need for my French Fries because I am allergic to peanut oil. (Just joking about the duck fat, but I really am deathly allergic to peanuts and peanut oil.)

I wish we didn't always take these bizarro stories and get all worked up about them. Who tries to deduct baby formula anyway? I'm really sorry this woman had breast cancer, but, I'm also sorry that she's wrong. I think the IRS is on solid ground here.

ON EDIT: Just to stave off the expected responses: yes, I realize that business food expenses are deductible. So shoot me. I didn't write those laws. But the issue here is for "medical" deduction. The cost of doing business with your baby has somehow not been codified into tax law yet.

Read "Rich Dad, Poor Dad" - great personal finance book, explains how the only way to get ahead is to own/run businesses - they get all the breaks....

Food is essential to life yet not tax deductible. Makes one wonder how exactly the decision making process works where some things are deductible and others aren't.

I'm not talking about going out to restaurants and ordering pizza, but the basics of life, absolutely; those are far more worthy expenses than the vast majority (and arguably all) of what is actually deductible.

I'm all in favor of raising them. Then, everybody gets one.

Why not just eliminate deductions, lower the overall rate, and cut out all the unnecessary expenses involved with tax preparation?

tax preparation expenses are (or should be) minimal. Most people have either standard deductions, or the basic simple ones of real estate tax paid, income tax paid, mortgage interest paid, and some charitable contributions. The above covers about 90% of American taxpayers.

It's super simple to do either on your own, or with Turbo Tax. People who spend $150 at H and R Blockhead are just stupid.

But while your idea has merit, there are too many entrenched interests to get rid of the real estate oriented deductions. They're even more powerful than those who have a stake in the current healthcare system, and until we see exactly what emerges out of the Congress for the President to sign, we still have no idea just how powerful the latter group of interests are.

as a medical expense, and get back to me on how that's working for you.

In short, the ordinary necessary things for living life are not unique enough to have constituencies lobbying for some sort of 'special' tax treatment. We wouldn't have deductibility of home mortgage interest if it weren't for a million realtwhores, bankers, and other assorted hogs at the trough who wanted the government to stimulate home ownership. Put those people on steroids, and you have the sub-prime mortgage crisis that threatened our whole economy with the abyss a year ago.

I'm an Enrolled Agent who represents people with tax issues before the IRS. Come on, people! Get creative with those deductions! Push the friggin' envelope, won't you?!

It's good for business.

I would disagree (a little) regarding the RE Tax in Home Mortgage deductions. Home ownership stabilizes neighborhoods and communities. And for many people, building home equity is a significant path toward building wealth. So there's a good reason to have those deductions.

But applied to second mortgages and vacation homes? Not so much...

Yes, I do believe in home ownership, but for it's own sake, not because we need to spend megabucks of tax loss to promote it. Tax deductibilty of mortgage interest cheapens the cost of that interest, allowing it to raise to a market level that fits what people really value it as. For example, if a fifth of mortgage interest comes back in tax savings, a 4% real market rate can rise to a 5% rate, since that 5% is really costing 4%.

By the way, I used to be an EA myself back in the 1980's, also a title officer for many of the last thirty-two years. I've since taken a rather jaundiced view of government-subsidized homeownership, since it contributes mightily to bubbles that burst and screw the economy.

Get the tax code changed.
:shrug:

Friggin' Killjoys!

You don't get the medical expenese deductions on the first 7.5% of your income. So if you're at $50K AGI, you'd need more than $3,750 in medical expenses before the deduction would kick in. The problem is, you have to be able to itemize before you can take the medical expenese deduction, and people with very low incomes are rarely homeowners -- and it's home ownership that gives people enough deductions to be able to itemize.

and will get to write those off for next year but they had to reach like $6,000.

Now that we can write them off though, it's fun looking through the list of deductible medical expenses to see what all qualifies. She hasn't been to the eye doctor this year so I'm encouraging her to go and update her prescription and get contacts now so that we can add that to the deduction.

To add to your post as well, either they are very low income and may not be homeowner, or they could be avg/high income and have health insurance so they may not reach the 7.5% with that either.

The doctor tells you you HAVE to eat a special diet due to a medical condition. This is never deductible as a "medical expense". This is really the same thing. They've got to draw the line somewhere or people will want to write off all foods they eat for some special "reason".