Costs of doctor-prescribed weight-loss plans are medical expenses according to the Internal Revenue Service.  This includes the cost of prescription drugs and weight-reduction programs that are ordered by doctors to treat obesity or prescribed to mitigate another ailment. Diet foods do NOT qualify as medicals -- they just replace foods that patients usually eat. The ruling is retroactive.  It applies to all open tax years, so you can amend 1999, 2000 and 2001 tax returns if you need to. Allowable expenses can be covered by flexible spending accounts.  This is a great deal for taxpayers, since very few filers get to deduct medical expenses.  Remember that medical expenses are only deductible to the extent that the expenses exceed 7.5% of adjusted gross income.


Source: Kiplinger Tax Letter
        April 12, 2002