IRS Allows Sex Change Surgery To Be Tax Deductible For Transgender Taxpayers

[Brooke777]

In what many have deemed a historic measure, the Internal Revenue Service announced this week that it would allow transgender taxpayers to deduct the cost of gender reassignment surgery from their taxes as a medical expense.

http://www.huffingtonpost.com/2011/11/11/irs-sex-change-surgery-tax-deductible-_n_1088767.html

[Devlyn]

Um, that's a game changer.

[Ms. OBrien CVT]

Great news.  Now if I only had the funds to pay for SRS, to be able to take it off my taxes.

[ZoeM]

O_o

My refund in a year or so is going to be through the roof.

Now, if only I could claim laser as a deduction... :/

[Jamie D]

O_o

My refund in a year or so is going to be through the roof.

Now, if only I could claim laser as a deduction... :/

If it is a "medical necessity" it may very well be deductible.

Let me also add that US taxpayers can file a Form 1040X and make changes retroactively for, I believe, three years.

[blueconstancy]

Weird. I thought it was already OK, from a case a couple year back.

And I filed the taxes with that deduction and already got an unchallenged refund.

....

Oh, I see, that article is from November 2011. Good; I was afraid for a second I'd anticipated this ruling and gotten away with something! (Which is BAD when it comes to the IRS.)

[~RoadToTrista~]

What does that mean? (I'm a dumb and dependent teenager) Does that mean I can just get SRS and not have to pay anything other than higher taxes? And would this apply to getting SRS outside the country?

[Jamie D]

What does that mean? (I'm a dumb and dependent teenager) Does that mean I can just get SRS and not have to pay anything other than higher taxes? And would this apply to getting SRS outside the country?

On the Long Form 1040, you are allowed to take a standard deduction, or itemize your deductions on Schedule A.

Schedule A has a section for "medical deductions."  The rules for medical deductions are found in the instruction booklet for the form.

You are allowed to deduct eligible medical expenses that are (at this writing) in excess of 7.5% of your gross adjusted income.

[Beth Andrea]

What does that mean? (I'm a dumb and dependent teenager) Does that mean I can just get SRS and not have to pay anything other than higher taxes? And would this apply to getting SRS outside the country?

No, a "deduction" is subtracted directly from your gross income. For example, if you made $30,000, you get one deduction for yourself...let's say that's $3,000...your "taxable income" is now $27,000. Taxes on that amount might be, say, $1,350 (5%). (You get more deductions if you're married, have kids, etc)

Gross income - deductions = taxable income

SRS--assuming it's the whole cost, not *just* the surgery--is around $20,000 in the US. Your gross income is $30,000. Because you're itemizing your deductions, you don't get your deduction (the $3,000 one), instead you get your itemized deductions; in this case, the SRS costs.

So now your taxable income changes from $27,000 to $10,000 ($30k income - $20k SRS deduction = $10k). 5% of $10k is $500, so you save $850 in taxes (more money in your pocket).

As Devlyn said...this is a game-changer.

[Arch]

This info about deducting surgery expenses has been around since at least 2010, when I filed my 2009 tax return and deducted my top surgery. I felt justified in doing so because of that much-publicized case that somebody referred to. All the same, I worried that the IRS might call me on it and ask me what kind of medical expenses I'd racked up.

They haven't so far.

[Beth Andrea]

This info about deducting surgery expenses has been around since at least 2010, when I filed my 2009 tax return and deducted my top surgery. I felt justified in doing so because of that much-publicized case that somebody referred to. All the same, I worried that the IRS might call me on it and ask me what kind of medical expenses I'd racked up.

They haven't so far.

Yup, the article mentions 2010:

...As Time is reporting, IRS officials announced its intent, via a "notice of acquiescence," to abide by a 2010 decision that held that some medical expenses from such surgeries could be deducted from income tax filings....

[calico]

hmmm this isgreat info!! now I know what to do on the 2013 tax's 

[blueconstancy]

Also, Trista, I definitely filed using out of country expenses. I have a letter from the doctor itemizing the costs, though, plus the bank order receipts showing what it was in US dollars (you can't just claim the amount it was in foreign currency, since that isn't usually the precise equivalent in US money - for example, $18,050 Canadian was $19,000 US when I got the bank drafts). If you want to do this, save ALL your receipts and evidence.