When it comes to the tax treatment of over-the-counter items as medical expenses, the IRS rules do often seem confusing, complicated and contradictory.
Nonprescription Drugs Recommended By A Doctor
According to IRS Revenue Ruling 2003-58, the law does limit the deduction for medicine or drugs to those drugs that require a prescription. Even when recommended by a doctor, medicines available over-the-counter are not deductible.
Nonprescription Equipment & Supplies
Limitations do not apply to other nonprescription items such as: bandages, crutches, thermometers, or blood sugar test kits. If otherwise qualifying as related to medical care, such items as these are deductible.
MedicinesYou can include in medical expenses amounts you pay for prescribed drugs. A prescribed drug is one that requires a prescription by a doctor for its use by an individual. As stated before, except for insulin (the one exception), you cannot include in medical expenses amounts you pay for a drug that is not prescribed. Example: Your doctor recommends that you take aspirin. Because aspirin is a drug that does not require a physician's prescription, you cannot include its cost in your medical expenses. However, this rule applies only to the deduction for medical expenses. It does not limit reimbursements of medical expenses by employer-sponsored health plans that reimburse the cost of both prescription and nonprescription drugs.
Drugs From Other CountriesIn general, you also cannot include in your medical expenses the cost of a prescribed drug brought in (or ordered shipped) from another country, because you can only include the cost of a drug that was imported legally. (You can include the cost of a prescribed drug the Food and Drug Administration announces can be legally imported by individuals.) However, you can include the cost of a prescribed drug you purchase and consume in another country if the drug is legal in both the other country and the United States.
Nutritional SupplementsYou cannot include in medical expenses the cost of nutritional supplements, vitamins, herbal supplements, “natural medicines,” etc. unless they are recommended by a medical practitioner as treatment for a specific medical condition diagnosed by a physician. Otherwise, these items are taken to maintain your ordinary good health, and are not for medical care.
Personal Use ItemsYou cannot include in medical expenses the cost of an item ordinarily used for personal, living, or family purposes unless it is used primarily to prevent or alleviate a physical or mental defect or illness. Example: the cost of a toothbrush and toothpaste is a nondeductible personal expense. Where an item purchased in a special form primarily to alleviate a physical defect is one that in normal form is ordinarily used for personal, living, or family purposes, the excess of the cost of the special form over the cost of the normal form is a medical expense. Example: You can include in medical expenses the part of the cost of Braille books and magazines for use by a visually impaired person that is more than the cost of regular printed editions.
You can include in medical expenses amounts you pay for a program to stop smoking. However, you cannot include in medical expenses amounts you pay for drugs that do not require a prescription, such as nicotine gum or patches, that are designed to help stop smoking.
You can include in medical expenses amounts you pay for contact lenses needed for medical reasons. You can also include the cost of equipment and materials required for using contact lenses, such as saline solution and enzyme cleaner.
Please see IRS Publication 502 for a complete list of medical expenses which may and may not be deducted.
This article is not a substitute for professional accounting services. Please consult a competent tax professional for answers to your specific questions.
Sources: IRS Pub 502, IRS Revenue Ruling 03-58