17.14 Costs Deductible as Business Expenses

In some cases, expenses may be deductible as business expenses rather than as medical expenses. Claiming a business deduction is preferable because the deduction is not subject to the adjusted gross income floor (17.1). However, the cost of a checkup required by your employer is a miscellaneous job expense subject to the 2% of adjusted gross income floor (19.3).

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Disability-Related Job Costs
If you are disabled and incur costs to enable you to work, the payments may be treated as a deductible business expense rather than as a medical expense.
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EXAMPLE
An airline pilot is required by his company to take a semi-annual physical exam at his own expense. If he fails to produce a resultant certificate of good health, he is subject to discharge. The cost of such checkups certifying physical fitness for a job is an ordinary and necessary business expense but the deduction is subject to the 2% floor for miscellaneous itemized deductions (19.3). If the doctor prescribes a treatment or further examinations to maintain the pilot’s physical condition, the cost of these subsequent treatments or examinations may be deducted only as medical expenses, even though they are needed to maintain the physical standards required by the job. Thus, a professional singer who consults a throat specialist may not deduct the fee as a business expense. The fee is a medical expense subject to the AGI floor.

The Tax Court allowed a licensed social worker working as a therapist to deduct psychoanalysis costs as an education expense; see 33.15.

Impairment-related work expenses.

Some expenses incurred by a physically or mentally disabled person may be deductible as business expenses rather than as medical expenses. A business expense deduction may be allowed if the expense is necessary for you to satisfactorily perform your job and is not required or used, except incidentally, for personal purposes.

If you are self-employed, claim the deduction on Schedule C (40.6).

If you are an employee, the expenses are listed on Form 2106 and if not reimbursed, entered on Schedule A; see 19.4. The expenses are a fully deductible miscellaneous itemized deduction; the 2% AGI floor does not apply.

EXAMPLES
1. A professor is paralyzed from the waist down and confined to a wheelchair. When he attends out-of-town business meetings, he has his wife, a friend, or a colleague accompany him to help him with baggage, stairs, narrow doors, and to sit with him on airplanes when airlines will not allow wheelchair passengers without an attendant. While he does not pay them a salary, he does pay their travel costs. He may deduct these costs as business expenses. They are incurred solely because of his occupation.
2. An attorney uses prostheses due to bilateral amputation of his legs and takes medication several times a day for other ailments. On both personal and business trips, his wife or a neighbor accompanies him to help him travel and receive medication. He may deduct the out-of-town expenses paid for his neighbor only as a medical expense. The neighbor’s services are not business expenses because assistance in personal activities is regularly provided. When his wife accompanies him, he may deduct her transportation costs as a medical expense; her food and lodging are nondeductible ordinary living expenses.
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