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By now, you've probably heard about the controversy between Star Jones and Rosie O'Donnell. According to a May 1, 2006, EUR article, Rosie has been publicly giving Star grief about not fessing up to how she miraculously lost all the weight so fast. Now that Rosie, herself a graduate of the gastric bypass surgery, is joining The View as a new co-host, it will be interesting to see how the show treats the delicate topic.
With many stars openly talking about their gastric bypass surgeries – notably Ann Nesby, Patti Austin and Al Roker, it's time to get the facts on how this all works; of course, from a finance and tax point of view.
First, get out your wallet. The average gastric bypass surgery runs about $26,000, with insurance companies only picking up some of the tab for the truly morbidly obese. This has prompted some weight loss facilities to offer "financing" for gastric bypass surgeries. This, however, is not like the financing available to anybody and everybody at the corner used-car lot. You don't have to have good "Credit" (Tower of Power 1987), but you will need to have, at least, "average credit" (credit score of 650) to even think about going this route. And then, there's the interest rates, which range from 9 to almost 20%.
Next, understand your tax rights. Un-reimbursed medical expenses are deductible, as an itemized deduction, to the extent that the expenses exceed 7.5% of your adjusted gross income. This basically means that if you make $50,000, you must have medical expenses greater than $3,500 before you can deduct a penny.
Moreover, the definition of what constitutes a deductible medical expense is very broad, and only allows those expenses paid to "diagnose, cure, mitigate, treat or prevent a physical disease or mental defect or illness." In the realm of weight loss, this includes expenses related to the following medical conditions: obesity, type 2 diabetes, hypertension, hypercholesterolemia, or heart disease. The key is to get an official diagnosis of this medical condition when you, "Go See the Doctor," (Kool Moe Dee 1986).
With diagnosis in hand, you will then need to know exactly what costs count as tax deductible in your quest to lose weight. Of course, any of your out-of pocket costs for the gastric bypass surgery itself will count. You may also be able to deduct the following: FDA-approved weight-loss drugs, physician and hospital-based programs, behavioral counseling, and dietitians and nutritionists. In addition, costs for popular weight-loss programs, like Weight Watchers™ and Jenny Craig™, may also be deductible, if recommended by your doctor. But, only the costs of the programs themselves are deductible; not the costs for the food or other related products.
All of that driving back and forth to the doctor and hospital may have you tired, but there's good news. You can also deduct your transportation costs associated with getting the medical treatment. Transportation includes costs spent on buses, taxis, trains, airplanes, ambulance services, parking fees and tolls. It also includes transportation expenses of a nurse or other caregiver who travels to give you medical treatment. If you use your own car for the purpose of getting medical treatment, you can treat your actual out-of-pocket expenses (i.e., gas or oil,), and your mileage (at the rate of 18 cents per mile for 2006) as medical expenses.
Finally, if you're trying to lose weight for vanity reasons, you can forget about deducting these as medical expenses. So, unless you're like Whitney and you "will never be fat" (as told by Whitney Houston in her 2003 Barbara Walters interview), you're going to have to treat all those weight-loss aids ( i.e., diet foods and drinks that meet your basic nutritional needs) as non-deductible. Also, health club or gym dues, nutritional supplements, over-the-counter products, diet foods and exercise equipment are typically not deductible as medical expenses.
Think you've got it? Here's an example to help bring it all home.
Aisha was morbidly overweight. Last year alone, she had spent over $2,000 on many weight loss aids; including: diet books, diet food and drinks. Nothing seemed to work. After years of having this problem, she decided to go see a doctor about her condition. The doctor told her she was suffering from the disease of obesity and advised her that she might be a great candidate for gastric bypass surgery to help reduce her weight. She agreed to have the surgery. As part of her after-care treatment, she also joined a gym, a weight reduction class, and, of course, purchased more diet food and drinks. She also bought a new skinny clothes wardrobe. All of this came out of her pocket, to the tune of $15,000. It was not covered or paid for by her insurance company.
The gastric bypass surgery is deductible because Aisha was diagnosed by her doctor as suffering from the disease of obesity. The fees paid for membership in the weight reduction class are also deductible. But the membership dues for the gym would not be deductible. Also, the cost of the diet books, diet foods or drinks (both before and after her surgery) would not be deductible medical expenses. And don't even think about writing off that post-weight loss wardrobe, because even if she looks good "In Those Jeans," (Ginuwine, 2003), clothing is definitely not on the list of tax deductible expenses.
Shannon King Nash is the author of the award-winning book entitled, "For the Love of Money: The 411 to Taking Control of Your Taxes and Building Your Net Worth." She uses song lyrics and entertaining stories ripped from the headlines to teach readers how to manage their finances and taxes. Shannon is a CPA, Tax Attorney, and regular expert commentator on KJLH FM Radio in Los Angeles, and has appeared on national television. To learn more about Shannon King Nash and "For the Love of Money" visit www.nashgroup-usa.com.