IRS - Obesity is disease, tax deduction

WASHINGTON -- Overweight Americans now have a new pocketbook reason to shed some pounds. Recognizing obesity as a disease, the IRS says it will begin allowing taxpayers to claim weight loss expenses as a medical deduction.

"It really opens the gate for everybody to be at a healthier weight. America really needs to wake up," said Linda Webb Carilli, a spokeswoman for Weight Watchers International Inc.

Apart from the tax break, the Internal Revenue Service ruling could pave the way for insurance companies and such government programs as Medicare to offer coverage for obesity treatment, experts say. Now, it is usually considered a symptom or precursor to some other disease.

"It legitimizes an important area that's been on the fringe," said Morgan Downey, executive director of the nonprofit American Obesity Association.

Taxpayers have been able to deduct the costs of weight loss programs as a medical expense since 2000 only if they were recommended by a doctor to treat a specific disease. Obesity itself was not recognized by the IRS as an ailment that qualified for the weight loss expense deduction.

Tuesday's ruling qualifies obesity itself as a disease.

Huge toll on health

There is mounting evidence that obesity takes a huge toll on the nation's health. In 1998, the National Institutes of Health estimated that 97 million adult Americans were overweight or obese; the Obesity Association estimates that 300,000 unnecessary deaths a year can be attributed to the disease.

Obesity is defined by the federal government as excessive mass for a given person's height. Some examples: a 5-foot-5 person is considered obese at 180 pounds; for a 6-foot person, 221 pounds is listed as obese. Obese people are at heightened risk of high blood pressure, diabetes, heart disease, stroke, several types of cancer and gall bladder disease. A social stigma also is frequently attached to being extremely overweight, the Obesity Association noted.

The IRS ruling cited this growing body of research, including a recent World Health Organization finding, for why it now believes "obesity is medically accepted to be a disease in its own right."

To take the deduction, a taxpayer will have to participate in a weight-loss program for medically valid reasons. Simply joining a gym or a weight control program to "improve the taxpayer's appearance, general health and sense of well-being" and not under a physician's guidance will not qualify, the IRS said.

Also not deductible are diet foods, even if they are an integral part of the weight loss plan. The IRS reasons that people have to pay for their food whether or not they are trying to lose weight.

The deduction comes in the area of medical expenses, which must in total exceed 7.5 percent of adjusted gross income and can only be taken by taxpayers who itemize their deductions.

The ruling applies not only to 2001 income tax returns -- which are due April 15 in most of the country -- but as far back as 1998. Taxpayers who want to take a deduction for past expenses need only file an amended return for the tax year in question.

The IRS has included smoking cessation programs as deductible medical expenses, as well as treatment and other costs related to alcoholism. IRS Publication 502 has the details on the medical deduction.