You may be able to recoup some of the expense of purchasing and maintaining your hot tub through a medical deduction on your tax return. In many cases, a medical expense tax deduction results in a 25-40% reduction of hot tub costs. According to IRS Publication 502, the costs of “diagnosis, cure, mitigation, treatment, or prevention of disease,” are tax deductible. The cost of treatment for accident injuries may also quality for a tax deduction.
Since a hot tub is usually considered personal equipment, to qualify it for a tax deduction, you will need to document that it is being used for the treatment of a medical condition or injury. Even though you derive enjoyment from your hot tub, and someone else may be using it as well, as long as you can prove that you bought it primarily to treat an injury or medical condition of yourself or a dependent (in accordance with the IRS requirements), you will be able to claim the hot tub as a tax deduction.
The benefits of hydrotherapy or soaking in hot tub are ideal for relieving chronic back or muscle pain, arthritis, nerve pain of Type II diabetes, fibromyalgia, and a number of other medical conditions. A doctor’s recommendation can turn your hot tub into a tax deduction, as long as you meet the IRS’ conditions. You will need to have all the necessary requirements in place before claiming the deduction.
Prior to buying a hot tub, request a doctor’s prescription for it as a “medical device.” Any condition that may benefit from hydrotherapy could be eligible. The prescription must come from a medical doctor (a prescription from chiropractor, nurse practitioner or non-MD practitioner will probably not meet this requirement). Include a report from your doctor that summarizes your condition, as well as copies of medical reports such as X-Ray, MRI and EMG. You will only have to show this documentation in the event that your tax return is audited.
Once you have a doctor’s prescription dated prior to your purchase of a spa, be sure to keep the receipts for the purchase, installation and maintenance of your hot tub. Routine maintenance expenses in the future may also be deductible, as long as your health condition does not change.
There are guidelines that require your expenses to exceed a certain cost threshold before you can start deducting medical expenses. As mentioned, for further information about medical expense tax deduction, refer to IRS publication 502. For tax advice, always consult a tax professional.