Can a Hot Tub Be Tax Deductible?
Thinking of purchasing a new hot tub this year? If so, you may be able to deduct a portion (or in some cases, the total amount) of the expenses from your tax returns by claiming it as a medical expense.
Medical expenses are defined by the Internal Revenue Service as "the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body. These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes."
According to Publication 502 from the IRS, some medical expenses can be deducted when filing an income tax return. In its opinion letter Index No.: 213.05-00, "Section 213(a) allows as a [tax] deduction the expenses paid during the taxable year for medical care of the taxpayer, spouse, or dependent." If a medical professional has diagnosed a medical condition that can be cured or relieved with hydrotherapy or swimming, a consumer may be able to claim a medical deduction for their hot tub and hot tub supplies.
The general health benefits of hot tubs are not enough for it to qualify as a medical expense; you must get a prescription or written treatment recommendation from your physician. Conditions that may qualify for a prescription include arthritis, chronic back pain, fibromyalgia, chronic depression, restless leg syndrome, as well as other diseases or injuries. Because a hot tub is of a particularly personal nature, the consumer must establish that it is primarily for the cure, mitigation, treatment or prevention of disease before the cost can be deducted. Bear in mind that if people other than the one prescribed will be using the hot tub, or if it will be used for enjoyment purposes in addition to the prescribed treatment/therapy purposes, you won't be able to deduct 100% of its cost. The value of your deduction will also depend on your tax bracket. Keep good records and discuss with your tax professional to make sure you can provide adequate proof of your medical needs to the IRS.
Capital improvement expenses can also be deducted for the installation of special equipment in the home. The purpose of its installation should be for medical care of either yourself, your spouse or any of the dependents living in that home. If it's a permanent improvement that increases the value of your home, the increase in value would be directly reflected in a decrease of your medical expense deduction. If the improvements have no effect on property value, the entire cost of installation can be considered as a medical expense. Consumers may need to have property appraised to determine if the value has or has not increased.
In summary, it you want to write off a new spa or hot tub, including covers, chemicals, equipment and other supplies, you must have a doctor's prescription for it. If you feel that you could benefit physically or mentally from warm water therapy, we encourage you to discuss the benefits of a hot tub or swim-spa with a qualified medical care professional and see if you're a candidate for prescribed spa therapy. Before you run out and buy a new spa, you should first check with a tax professional in your area to make sure your hot tub, related supplies and other expenses can be included as a medical expense write-off on your federal or state tax returns.