is psychotherapy tax deductible?

[tomato]

hi all, i am a psych resident currently in psychotherapy and it is taking a large chunk of my salary away. my doc told me that she thought residents were able to deduct the cost of psychotherapy from their federal taxes. anyone know if this is true? i am not in psychoanalytic training as i know that this type of therapy is NOT deductible. thanks for any thoughts you might have!

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[whopper]

I would think so, but the better person to ask would be an accountant. Do you got one?

 

[MBK2003]

Two ways it can be deducted, although I think you can choose only one. The first is as a non-reimbursed medical expense (need to have it total >7% of your income), and the 2nd is as a non-reimbursed job expense (I'm not sure the percent of total you need to deduct here, since I use option 1).

MBK2003

 

[Doc Samson]

Two ways it can be deducted, although I think you can choose only one. The first is as a non-reimbursed medical expense (need to have it total >7% of your income), and the 2nd is as a non-reimbursed job expense (I'm not sure the percent of total you need to deduct here, since I use option 1).

MBK2003

Can deduct it as a job expense no matter what the percentage, it's just like deducting office supplies or mileage on your car driving between jobs. Just call it "supervision."

 

[OldPsychDoc]

Can deduct it as a job expense no matter what the percentage, it's just like deducting office supplies or mileage on your car driving between jobs. Just call it "supervision."

Actually, the total of all these expenses needs to exceed 2.5% (I think) of your AGI in order for it to reduce your taxable income at all. And if you also will need enough other Schedule A deductions (mortgage insurance, charitable contributions, etc.) to itemize in order to exceed the standard deduction and make itemizing worthwhile....

Still, as a resident, your salary is probably low enough that you'll beat the 2.5% threshhold.

 

[Doc Samson]

... unless you moonlight. Then you're an independent contractor and considered an independent business entity - deduction city, baby!

 

[OldPsychDoc]

... unless you moonlight. Then you're an independent contractor and considered an independent business entity - deduction city, baby!

..with the privilege of paying the Self-Employment Tax, to make up for the FICA withholding they didn't get from your non-employer.

(Really glad to be in a salaried position!)