December 18, 2007 12:00 am

IRS Okays Diagnostic Medical Procedures

Individuals can claim an itemized medical deduction for costs related to the diagnosis, mitigation, treatment, cure or prevention of disease, or any condition affecting any structure or function of the body. The IRS has now made it clear that diagnostic procedures need not be recommended by a doctor in order to be deductible. Also, they can be testing for healthy functioning; they need not be looking for disease. "Diagnosis," while usually determining a medical condition or disease, can also include a determination that a condition is absent. Further, a taxpayer does not have to choose the least costly testing method. Examples: Annual physicals, electronic body scans, and home pregnancy tests.

Bonus: Since the cost of diagnostic tests are a deductible medical expense, they can also be covered under a flexible spending account (FSA), health reimbursement account (HRA), or a health savings account (HSA).

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Tax Glossary

Accelerated cost recovery system (ACRS)

A statutory method of depreciation allowing accelerated rates for most types of property used in business and income-producing activities during the years 1981 through 1986. It has been superseded by the modified accelerated cost recovery system (MACRS) for assets placed in service after 1986.

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