Tax Deduction on Hot Tubs

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Most people probably consider a hot tub a luxury, but it's possible to deduct one on your taxes. And you can potentially continue to take deductions on the hot tub in later years and avoid other state taxes. However, proving the necessity of a hot tub is going to be tough, and expect the Internal Revenue Service to want every detail about the hot tub purchase in case of an audit.

Identification

To deduct a hot tub on your taxes you must prove it's a medical necessity. This doesn't mean the hot tub makes you feel better in general, but helps with a specific condition, such as arthritis, according to George Saenz of Bankrate.com. You can use the hot tub for personal reasons, but personal reasons cannot be your primary reason for the hot tub purchase.

Other Deductions

You can deduct expenses related to the hot tub, such as installation. You also can deduct repair and maintenance during the lifetime of the tub on future tax returns--assuming that you still need the hot tub for medical reasons. Some states even waive sales tax on medical items. However, eligibility for a sales tax waiver depends on the laws of your state.

Warning

It's best to limit the purchase of the hot tub so you minimize personal use. For instance, the IRS may question the motives of the purchase of a hot tub that fits eight people if you're only the person that needs it for medical reasons. You can modify the hot tub, such as adding speakers, but you might want to avoid deducting any costs that the IRS could construe as unnecessary.

Tip

Your total medical costs for the year must exceed 7.5 percent of your gross income to deduct any medical costs. Also, you cannot receive reimbursement for the hot tub, such as from a health insurance plan. You don't need any proof that the hot tub is a legitimate medical expense unless you're audited, in which case you want evidence of the tub's medical necessity, such as a doctor's prescription. Consult a tax professional for any unusual circumstances, such as how to handle a hot tub for a short-term injury.

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