South Carolina Life and Health Practice Exam

The IRS states that a taxpayer's medical expenses that exceed 7.5% of their adjusted gross income are tax deductible. Which of the following may be considered a medical expense under this rule?

1. General health check-ups

2. Long Term Care Insurance premiums

3. Cosmetic surgery costs

4. Gym membership fees

The correct answer is: Long Term Care Insurance premiums

Long Term Care Insurance premiums are classified as a medical expense that can be tax-deductible under IRS guidelines, particularly because they are related to the care needed for chronic illness or certain health conditions. This deduction can help alleviate some of the financial burdens associated with long-term care, which can be substantial as it often extends over many years and entails various services. In contrast, while general health check-ups are important for overall well-being, they typically do not incur out-of-pocket expenses that exceed the threshold for deductibility. Cosmetic surgery costs are usually not deductible unless they are deemed medically necessary, which typically does not apply to aesthetic procedures. Gym membership fees are generally considered personal expenses and are not deductible, even if they are aimed at improving health. Thus, the nature of Long Term Care Insurance premiums aligns with the IRS criteria for tax-deductible medical expenses, making it the correct choice in this scenario.