The IRS has ruled that tuition costs for a special school that has a program designed to educate children with learning disabilities and amounts paid for a child’s tutoring by a teacher specially trained and qualified to deal with severe learning disabilities may also be deducted. (Revenue Ruling
78-340, 1978-2 C.B. 124.) Special instruction or training or therapy, such as sign language instruction, speech therapy, and remedial reading instruction also would be deductible. Related books and materials can qualify for the medical expense deduction
Generally, to qualify for the deduction, the child’s doctor must recommend the special school, therapy, or tutoring, and there must be a medical diagnosis of a neurological disorder, such as severe LD, made by a medical professional. Transportation expenses to the special school or to the tutor also qualify for a medical expense deduction. If transportation is by car, the allowable expense in 2005 is fifteen cents per mile plus parking and tolls, or the actual cost of operating the vehicle.
Diagnostic evaluations also qualify for a medical expense deduction. This can include testing by a speech-language pathologist, psychologist, neurologist, or other person with professional qualifications.
Note: Expenses claimed as a medical expense deduction and later reimbursed by a school district or insurance company must be reported as taxable income
for the year in which the reimbursements are received.
must be claimed on Schedule A, Itemized Deductions
, and are subject to certain limitations. First, the family must have itemized deductions that exceed their standard deduction in order to use Schedule A. Second, medical expenses are allowed as a deduction only to the extent that they exceed 7.5 percent of adjusted gross income, a significant threshold for many families. (See IRS Publication 502, Medical and Dental Expenses.)
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Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases.