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Edited version of private ruling
Authorisation Number: 1011834545368
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Ruling
Subject: Medical expenses offset
Question and answer
Are you entitled to include your net medical expenses relating to your dental procedure when calculating your net medical expenses tax offset?
Yes.
This ruling applies for the following periods
Year ended 30 June 2011
Year ended 30 June 2012
The scheme commenced on
1 July 2010
Relevant facts
You are an Australia resident for income tax purposes.
You have had all your lower teeth removed.
Your dentist recommended for you to have a full lower denture and dental implants to provide stability for the lower denture.
You had two dental implants inserted and the procedure was carried out by a legally qualified oral surgeon. You have retained invoices as evidence of expenses you incurred.
A letter provided by your oral surgeon states that the dental implants are not for cosmetic reasons because they are buried in the jaw bone to provide an anchor for the functioning of the lower denture.
You have further dental work to be carried out in relation to the dental implants and to have a removable over denture fitted.
You will incur expenses (less Medicare and private health reimbursements) relating to the dental implants greater than $2,000 for years ended 30 June 2011 and 30 June 2012.
Assumptions
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Income Tax Assessment Act 1936 Subsection 159P (4)
Reasons for decision
A medical expense tax offset is available to a taxpayer under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where the taxpayer incurs medical expenses for themselves or a dependant who is an Australian resident.
Subsection 159P(4) of the ITAA 1936 specifies that for the purposes of the medical expense tax offset a medical expense includes payments to a legally qualified dentist or dental mechanic for the supply, alteration or repair of artificial teeth.
However, if the dental service or treatment is solely cosmetic the expense becomes an ineligible medical expense.
In your case, the dental implants are not for cosmetic purposes but to stabilise your denture and enable it to function properly. Therefore your dental implant expenses are eligible for the purposes of the medical expenses tax offset.
Therefore, the expenses incurred for your dental procedure, less any refunds you may get from Medicare or a private health insurer, can be included as medical expenses for the purpose of calculating the medical expenses tax offset under section 159P of the ITAA 1936.
The medical expenses tax offset is only available if the net amount of medical expenses (i.e. the total amount the taxpayer is out of pocket after any entitlement to reimbursement from a health fund or government authority is taken into account) exceeds $2,000.
Calculating your medical expenses tax offset
You can calculate your net medical expenses tax offset by using our online calculator, which is available from our website www.ato.gov.au by searching for 32036.
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