For the 2012 tax year, you can take a tax deduction on medically necessary home improvements — like installing a wheelchair ramp and other projects that make life easier for an ill or injured family member — if you: Itemize deductions and spend more than 7.5% of your adjusted gross income on the upgrades. Starting in 2013, if you’re under age 65, you can’t take the tax deduction on medical expenses until you spend 10% of your AGI. But if you’re 65 or older in 2013, you can stick with the 7.5% AGI tax deduction threshold through the end of 2016.

The rules for tax deductions on medical home improvements are tricky:
1. Start with what it costs to modify your home.
2. Subtract the value the upgrades add to your home.
3. What’s leftover is your tax deduction — if you meet your AGI threshold.
How it works: Say you’re 45 years old and spend $20,000 to put a bathroom on the first floor of your home because your husband can’t climb stairs anymore. Your AGI is $100,000. A REALTOR® says the bathroom adds $10,000 to the value of your house.