Updated January 06, 2015.

I'm in the middle of doing my 2009 taxes and, as in years past, I'm pulling my hair out trying to decide what I can and cannot deduct. I have the business deductions figured out, but I'm always fascinated by what the IRS deems is acceptable (or not) when it comes to medical expenses.

Medical and Dental Expenses

Since I'm "pulling my hair out" I decided to look at IRS Publication 502, which defines medical expenses as "the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.

These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes."     But, not "expenses that are merely beneficial to general health, such as vitamins or a vacation."

What About My Hair?

The IRS allows a deduction for a wig "upon the advice of a physician for the mental health of a patient who has lost all of his or her hair from disease. " Very appropriate, but looks like I don't qualify. Perhaps a hair transplant?  Although I could use one, the IRS considers it a cosmetic procedure.  Oh well, maybe I'll take some aspirin - whoops that's also not deductible.

What About My Health Insurance Premiums?

Self-Employed: If you are self-employed, the answer often is yes -- the premiums you pay to cover yourself and your dependents probably are tax-deductible. They are not, however, if you, your spouse, or your dependents are covered by another employer's group health insurance plan.

Health Savings Accounts: If you work for a company that offers health insurance as part of what's known as a cafeteria plan, you may have a health savings account (HSA). The contribution you make to your HSA is 100% tax deductible up to a limit of $5950 for family coverage and $3,000 for individual coverage -- for 2009.

If you are not self-employed, and you don't work for a company that provides health insurance with a cafeteria plan, the Internal Revenue Service (IRS) allows you to count health and dental insurance premiums as part of the 7.5% of your adjusted gross income that has to be spent on health care before any out-of-pocket medical expenses can be deducted.

That's good news for me. My wife and I paid more than $15,000 in health insurance and long-term care premiums in 2009, a big deduction that will help lower my taxes.

Please leave a comment below or in the Health Insurance Forum.

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