How to Guide Clients on Tax Deductions for Wigs
by James Todd, CEO, Dimples | The Link Magazine, Issue 57
When can a wig be tax deductible?
According to IRS Publication 502 (Medical and Dental Expenses), a wig may qualify as a medical expense if it is purchased upon a physician's advice for the mental health of a patient who has lost hair due to disease. Here are the essential requirements:
1. Medical Necessity
The wig must be prescribed by a licensed healthcare provider to treat a medical condition that causes hair loss. This includes:
When can a wig be tax deductible?
According to IRS Publication 502 (Medical and Dental Expenses), a wig may qualify as a medical expense if it is purchased upon a physician's advice for the mental health of a patient who has lost hair due to disease. Here are the essential requirements:
1. Medical Necessity
The wig must be prescribed by a licensed healthcare provider to treat a medical condition that causes hair loss. This includes:
- chemotherapy or radiation treatment
- alopecia areata or other autoimmune hair loss conditions
- medical conditions resulting in permanent or temporary hair loss
- NOTE: wigs purchased purely for cosmetic preference do not qualify
2. Proper Documentation
Clients should retain:
- a written prescription or letter of medical necessity from their physician
- receipts and invoices for the wig purchase
- any relevant medical documentation connected to hair loss treatment
- clear documentation is important if the deduction is ever questioned
3. Itemizing on Schedule A
To deduct the expense:
- clients must itemize deductions using Schedule A (Form 1040)
- total medical expenses must exceed 7.5% of adjusted gross income (AGI) to qualify
- if medical expenses do not surpass that threshold, the wig cost cannot be deducted