Tax deductions when building a new wheelchair accessible house for disability (MS)

You're asking a really good question that a lot of people miss! Medical expense deductions can absolutely apply to new construction, not just modifications. The key is that the costs must be for features that don't add to the property value but are there specifically for medical care. For your situation, you'd need to figure out the difference between a regular feature and the accessible version. For example, if a standard doorway costs $300 but the wider doorway costs $500, you could potentially deduct that $200 difference. Same goes for accessible bathrooms, ramps instead of stairs, lowered countertops, etc. The IRS looks at the "but for" test - would you have spent this money "but for" your medical condition? Keep detailed records of all your construction costs showing the difference between standard features and the accessible versions. Your contractor should be able to provide this breakdown. Remember that medical expenses are only deductible if they exceed 7.5% of your adjusted gross income when you itemize.

Just wanted to share my experience with this situation. After struggling to figure out all my medical deductions for my dad's accessible renovation, I found this site called https://taxr.ai that analyzed all our construction documents and medical records. It automatically identified which accessibility features qualified as medical expense deductions and calculated the deductible portion. The tool saved me hours of research and probably found deductions I would have missed. It pulled out all the eligible expenses from our construction contracts and matched them with IRS guidelines. It also helped create the documentation package I needed for our tax return. Might be worth checking out since you're dealing with new construction which can be even more complicated than renovations.

I just had to come back and say THANK YOU for recommending https://taxr.ai! We uploaded all my brother's construction documents for his son's accessible house and it was amazing. It identified over $45,000 in qualifying medical expense deductions that we wouldn't have caught. The system specifically flagged the zero-entry shower, widened doorways, specialized HVAC for respiratory issues, and even the custom kitchen modifications as partially deductible medical expenses. It gave us a detailed report showing which portion of each item qualified based on the cost difference from standard construction. The best part was that it created all the documentation we'll need if the IRS ever questions these deductions. My brother's accountant was super impressed with how thoroughly it was all laid out!

Something else you should consider - dealing with the IRS directly on this might be worth it. I had similar questions about my dad's accessibility remodel and couldn't get clear answers online. Tried calling the IRS for weeks with no luck getting through. Finally used https://claimyr.com to get an IRS agent on the phone (you can see how it works at https://youtu.be/_kiP6q8DX5c). Got connected with an actual IRS specialist who walked me through exactly which construction elements qualified as medical expenses for tax purposes. They clarified that new construction can absolutely qualify if you can document the excess cost for medical features. The agent even emailed me specific IRS publications that addressed my situation, which my CPA hadn't found on his own. Saved us thousands in deductions we would have missed.

I need to admit I was completely wrong about Claimyr. After expressing my skepticism, I decided to try it since I've been trying to get clarification on medical construction deductions for months with no luck. Used the service yesterday and got connected to an IRS tax law specialist in about 40 minutes (while I just went about my day until my phone rang). The agent confirmed that new construction accessibility features CAN qualify as medical deductions if they're specifically for medical care and don't add significant value to the home. She directed me to IRS Publication 502 and explained exactly how to document the excess cost method for my situation. This was information I couldn't find clearly stated anywhere online. Honestly shocked at how helpful this was after months of frustration.

Just went thru this with my mom who has Parkinsons. Make sure u get a letter from ur doctor that specifically says u need these modifications for ur MS. Our accountant said this is super important if u ever get audited. Also some stuff like grab bars, ramps, and modifying switches actually might be 100% deductible not just the difference in cost. But stuff like wider doorways is usually just the difference between standard and wide. Keep ALL receipts and get the builder to break down every accessible feature separately. Our builder was annoying about it but we pushed and finally got itemized costs.

Has anyone here used tax software for this type of situation? I'm wondering if TurboTax or H&R Block can handle these medical construction deductions properly. Getting worried I might need an actual CPA this year.

Don't forget about state tax benefits too! Some states have additional tax credits or deductions for disability-related home modifications that go beyond what the IRS allows. When we built our accessible home for my wife (spinal cord injury), we got an additional state tax credit that the IRS doesn't offer. Also check if your state has property tax exemptions for disability modifications. In our state, certain accessibility features don't count toward the assessed value of the home for property tax purposes, which saves us about $600/year.

One thing I'd add that hasn't been mentioned yet - make sure you understand the timing of when you can claim these deductions. Since this is new construction, you'll typically claim the medical expense deductions in the tax year when the house is completed and you move in, not when you pay for construction draws throughout the building process. Also, if you're financing the construction, only the actual out-of-pocket costs for the medical modifications count toward your medical expense deduction - you can't deduct the portion that's financed until you actually pay it. This caught me off guard when we built our accessible home. Keep a separate ledger tracking just the medical-related accessibility costs as construction progresses. It'll make tax time much easier and help if you ever need to provide documentation to the IRS. Having everything organized from the start is way better than trying to sort through months of construction invoices later!

One additional resource that might help - the National MS Society actually has a tax guide specifically for people with MS that covers home modifications and new construction. I used it when we were dealing with similar questions for my sister's accessible home build. They break down exactly what documentation you need from your neurologist and how to work with contractors to get the cost breakdowns the IRS wants to see. The guide also has sample letters you can use to request the medical necessity documentation from your doctor. You can find it on their website under resources for financial assistance. It's much more detailed than the general IRS publications when it comes to MS-specific accommodations. Since you mentioned your MS has progressed to needing these accommodations, having MS-specific guidance really helped us understand which features were most likely to qualify and how to present them properly on the tax return. Good luck with your build! It's so worth it to have a home that truly works for your needs.