Hot Tub Forum
Original => Hot Tub Forum => Topic started by: SpaMorph on April 15, 2007, 12:45:29 pm
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When I purchased my Grandee, I had a docs prescription, so I didn't pay sales tax.
Can we write off the cost of the tub too?
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No
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You need to run that by a tax professional. Certain medical expenses are allowed to be deducted from your federal income taxes. There is a hurdle on medical expenses.
If your state has an income tax it may also be deductible there, but largely depends on the state.
Best bet is to talk to a tax consultant.
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I cold never get a clear answer on this. Most tax folks will shy away from this guestion if asked in a "General manner" as in "Hey bob, you're an accoutant, If I get a pescription for a hot tub, can I write it off?"
I've seen answers and calculations that invole the value of the home being involved in it, (you can only deduct the difference of the cost of the tub, less the increase in home value). I've seen warnings that the tub must primary be for medical use, and luxary items such as waterfalls, and lights and fancy decks can be cause for an audit. I've heard the installation and related expenses can also be deducted.
I went with a new tax guy this year, and with my winning the new Caldera Geneava, asked him about this. (Folks, if you win anything over a value of $500, the prize folks will submit a 1099 to the IRS stating you received the item. The IRS will consider the MSRP of the prize to be "Taxable Income".and the Feds will look for 25% of the MSRP next April. :P )
As far as a medical deduction it was explained that medical costs (combined) that are over 7.5% of your gross adjusted income can then be deducted from you Federal Tax. Medical costs can be grouped togethor: ie: prescriptions, co-payments, eye glasses, surgey etc. So if your tub is mandated by a doctor, (you have a presciption) you can add the cost of the tub and related costst, to your total medical expsenses. Only the dollars over 7.5% of your GAI can then be deducted.
But you'd be a fool not to call your accountant before even considering it and discussing all the details and reviewing everything. Never take free tax advice from the internet. ;)
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I suspect someone taking a 10K deduction for a spa would at least merit a peeksie by the IRS. I can see a whole can of worms opening. If it's for a medical need by one person, they might not like someone deducting the cost of a 6 person spa, etc......
It would be the therapy vs fun factor maybe?
We usually have a few thousand dollars per year of medical expenses I can't deduct because of that stupid hurdle. With health care costing what it does, and more and more employers passing health care costs onto their employess by higher premiums, copays, and deductibles, etc.... it would be nice to have that hurdle lowered or eliminated.
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I guess I responded based on the tub that was purchased. I thought justifying a tub that size for one patient would involve some pretty creative writing. My friend's son is in a wheel chair, he can't walk or talk and his movement is very limited. He has a very advanced case of Lyme disease so he has a lot of pain. They purchased an indoor whirlpool tub to aleviate some of his arthritic symptoms. This was considered an acceptable medical deduction. It follows many other medically necessary items that this child has. I would really be afraid to try to deduct the cost of my tub, even though my motivation for purchase was arthritis, also from Lyme. My tub is also too large to say I am the only one who benefits from it (although that could change if I don't soon start my South Beach Diet! ;D).
As others say, talk to your tax consultant.
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From what I've heard, the tub doesn't have to be for the sole and exclusive use of the person with the ailment, it can be used by others and not some industrial therapy tub, it can very much be one of the hot tubs we discuss here.
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Spa morph,
You didn't pay sales tax? Is that to say the actual dealer didn't charge you any sales tax simply because you had a note from your doctor? I thought you were charged, but could later deduct it on your tax filings?
Are you in the United States?
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That may vary state by state. Here in MN, we don't get consideration for sales tax, but it might be considered part of the cost of the spa that might get deducted.
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That may vary state by state. Here in MN, we don't get consideration for sales tax, but it might be considered part of the cost of the spa that might get deducted.
Ah, sales tax is a state tax and will vary by state. Cost of the tub maybe deducted as a medical deduction fromt the federal taxes as I outlined.
got it.
/I'm even confusing myself this a.m. ;)
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Are you trying to say that topics regarding the IRS have the potential to be confusing?
Couldn't be. The IRS is the easiest government entity to understand!
NOT
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Why be afraid? Worst case they deny the deduction putting you back to where you are today. Of course being audited isn't fun so perhaps that's a consideration. If you feel "wrong" deducting the whole thing then deduct half or a quarter - if it's a legitimate expenditure that is prescribed by your Dr. then I don't understand why you'd be willing to just give it away at the front end without even a discussion.
I would really be afraid to try to deduct the cost of my tub, even though my motivation for purchase was arthritis, also from Lyme. My tub is also too large to say I am the only one who benefits from it
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After being hit by a car and numerous trips to the Dr. and a chiropractor, it was suggested that a hot tub would help in treatments, and so on. Because of this I used the cost of my spa as a medical expense and was allowed to deduct the entire cost off my taxes. I was told by a former IRS tax prep person that if a Dr. prescribes this, it can be counted as an uninsured medical expense and can be used as a tax deduction. However, it is very important that a medical professional recommends this as part of ongoing treatment.
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Good luck
http://www.hurt911.org/therapeutic/hot-tub-insurance-tax-deduction.html
http://www.bankrate.com/brm/itax/tax_adviser/20041013a1.asp
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After being hit by a car and numerous trips to the Dr. and a chiropractor, it was suggested that a hot tub would help in treatments, and so on. Because of this I used the cost of my spa as a medical expense and was allowed to deduct the entire cost off my taxes. I was told by a former IRS tax prep person that if a Dr. prescribes this, it can be counted as an uninsured medical expense and can be used as a tax deduction. However, it is very important that a medical professional recommends this as part of ongoing treatment.
Is that to say, you were able to deduct the entire cost of the tub, regardless if your other medical expesenses met the 7.5% of you adjusted gross income?
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Everyone has to eat that 7.5% hurdle, if they are doing schedule A correctly.
It's only what is in excess of that 7.5% that can be deducted. But an expensive item like a spa might be the boost needed to allow a whole bunch of other medical related expenses which are too small to hit the hurdle. Like copays, etc....
I usually pay several thousand dollars out of pocket of deductible expenses every year, but not enough to break even on the 7.5%. At least my healt insurance premiums are pre tax, so that helps a teeny bit.
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In the Great State of Texas, if you have a prescription from an MD or a chiropractor, you do not have to pay sales tax on a spa. I sold 153 spas last year, 150 customers had a doctor's Rx. Many of my customers tell me their accountants write off their spa as a medical expense on their income tax, chemicals and accessories as well. Many of my customers are CPA's. They've told me they write them off.
Terminator
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In the Great State of Texas, if you have a prescription from an MD or a chiropractor, you do not have to pay sales tax on a spa. I sold 153 spas last year, 150 customers had a doctor's Rx. Many of my customers tell me their accountants write off their spa as a medical expense on their income tax, chemicals and accessories as well. Many of my customers are CPA's. They've told me they write them off.
Terminator
Wow, I wonder what you have to tell your doctor to get a prescription? Are all these folks really in bad physical condition?
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I bought a hot tub from Terminator a few months ago. I told him I wanted a Jetsetter as I lived alone and would be the only one who would ever be in it. Also, I wanted the moto-message for my back as I needed a small thearaputic tub, not a party tub. He asked what was wrong with my back and I told him I have a herniated disk and a history of back problems. No surgery (so far) but I have had several trips to the hospital for cortesone injections to the spine.
I had a doctor prescription for the hot tub and, as Term said, it saved me the sales tax here in Texas (other states may have different rules). As far as income tax deductions on federal tax, there is no question such a deduction would raise a red flag. But, if the tub is really for your medical problems and your doctor wrote an Rx for it, do not hesitate to write it off. Chances are good it will be approved by th IRS if you are audited. Also, an audit does not necessarily mean they will check every deduction. Often times they only want verification to substantiate the deduction in question. Having said that, if there are other "questionable" items on the return, they most certainly will look into those while they are at it.
The bottom line is that if everything is on the up and up and you are not trying to pull a fast one, AND your doctor prescribes a hot tub for medical reasons, by all means deduct it - that is why they permit medical deductions in the first place.
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Ah, sales tax is a state tax and will vary by state. Cost of the tub maybe deducted as a medical deduction fromt the federal taxes as I outlined.
got it.
/I'm even confusing myself this a.m. ;)
Drewstr,
You are very correct on the medical deduction assessment! With a prescription the spa is expected to be used primarily for medical purposes.
However, a spa is not "real property", (because it is considered portable) therefore the home value adjustment would not be applicable.
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Everyone has to eat that 7.5% hurdle, if they are doing schedule A correctly.
It's only what is in excess of that 7.5% that can be deducted. But an expensive item like a spa might be the boost needed to allow a whole bunch of other medical related expenses which are too small to hit the hurdle. Like copays, etc....
I usually pay several thousand dollars out of pocket of deductible expenses every year, but not enough to break even on the 7.5%. At least my healt insurance premiums are pre tax, so that helps a teeny bit.
If someone has sever enough problems to warrant a perscription for a spa, I would expect that they also have $5K or $10K in medical to help them address the issues. One thing many people overlook is that even "voluntary" mendical expenses (like Lasiks for both me and my wife) ALSO can be included in those expenses that make up the 7.5%. Combine that with other "regular" monthly perscriptions (like wife's birth control & asmtha, etc) and I was able to get my medical expenses up to nearly $20K last year. Of course, it was a concerted effort and the lasik's was planned (since we had some extra cash). Never even thought about trying to list the spa as a deduction nor would I. My father had VERY sever back issues and actually recieved a VERY controversial procedure back in the early 70's (at the time it was outlawed in the States and a baseball player had it done around the same time as my dad). The ball player was suspended. The law never reached out to my dad and about 5 years later the procedure was approved (fusing disk or something) so in the end he didn't do anything illegal but I do remember a Christmas period (about 20 days) where my dad literally could not sit up without extreme pain so he spent all Christmas flat on his back. He's VERY mobile now. Doesn't run marthons or anything but can fish, play with his grandkids, got remariied about 16 years ago, etc.