IRS Tax Deduction

Deduct the Cost of Your Spa

If you purchase a hot tub, spa, or sauna for the health benefits, then you might be able to deduct the expense on your next income tax return.

Here’s what you need to know:

You must have a note from your doctor recommending you hydrotherapy to treat a debilitating medical condition. (Hydrotherapy is the act of treating an ailment with water).
Both renters and homeowners can take advantage of the deduction; the deduction is bundled into all of your tax deductible medical expenses. The technical term is capital-improvement medical deduction.
The spa or sauna and installation costs can be deducted, but add-ons are not eligible. For example, extras such as lights, sound systems, and tiling go beyond the doctor’s orders.
Maintenance and water care expenses may be deducted every year you own the hot tub, spa, or sauna as long as it continues to qualify as a capital-improvement medical deduction.
If you deduct the hot tub from your taxes when it is installed, you will not be able to deduct it as a home improvement when you eventually sell the house.

We recommend you work with an accountant to determine how much you can deduct on your taxes. But generally speaking, you total the cost of the unit, installation fees, maintenance fees, and water care expenses. Then, you look at the value of your home. If the value increased, then you will be able to deduct less than you would if your home’s value didn’t change at all. An appraisal may be necessary to determine this, but again, your accountant knows best.