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Paying for gender transition: hidden costs and savings

What’s your time worth?

Time is money, as they say. Your time has potential value which can be increased depending on how you use it.

Let me give you an example. Melanie Anne Philips writes that she spent 2,000 hours her first year doing her own electrolysis. That is the same number of hours as a full-time job. I spent about $6,000 in my first year of professional electrolysis. If I’d chosen Melanie’s option and required the same amount of time, the equation works like this:

The cost of my labor to do my own based on these assumptions would be $3.00 an hour (work 2,000 hours to save $6,000). If I used that same amount of time to take a second job, anything I made above $3.00 an hour after taxes would make it more valuable to spend my time working and leaving the zapping to a pro. Even flipping burgers would be a more cost-effective use of my time.

There are other factors, like the advantage of being able to stay at home (and save babysitting costs or something similar). You’ll need to figure out the advantages and disadvantages in your own case.

Most things that save you time cost more money. What you have to do is determine which is more valuable to you– money or time. Both are finite resources, so you must determine the best way to spend both.

Lost income

Also, if you are self-employed or have a job based on wages, day rates, tips, or commissions, you may need to factor in missed work due to transition. For instance, if you take four weeks off for SRS, but you only have two weeks of vacation, you will need to adjust your budget to reflect the two weeks of unpaid leave.

Quality of outcome

Cutting corners on transition costs must be done after careful consideration. For instance, if you go to someone cheap for a nose job to save money, but the poor result requires you to get it redone, it may end up costing more than going to someone better in the first place. Not that more costly is necessarily better, but you need to weigh the risks and decide if you’re comfortable with that.

Another example: I did my own taxes one year, to save $150.00. The next year I used a pro, who pointed out that I had missed several thousand dollars in deductions. Sometimes attempts to cut corners can be more costly than getting qualified help.

Interest on credit

If you get a loan or use a credit card to pay for transition expenses, the actual cost will be higher if you include the interest you’d pay vs. paying cash. For details see my page discussing credit options.

Hidden transition savings

Insurance coverage

After Johns Hopkins closed its renowned gender clinic in the late 70’s, insurance companies have used this and subsequent negative medical studies about transsexuals as a reason to classify “transsexual surgery and related services” as “experimental,” “cosmetic,” or “medically unnecessary.” Due to our small numbers, TSs really had little recourse. The battle rages on with many insurance companies today. Some women have been lucky enough to be covered under insurance, but many of us have had to pay for most of our transitions out of pocket.

The true injustice is that hormonal therapy, psychiatric care, and gynecological surgeries similar to SRS are covered for genetic females. The best way to fight injustice sometimes is to use a little cleverness. There are a few ways to get items like therapy and hormones covered, even if your policy specifically excludes them for transsexuals. If your doctor classifies it as a hormone imbalance, prescriptions and injections will most likely slip under their radar. Same with gender therapy listed as common depression. Some people have had facial feminization done during an unrelated corrective procedure which was covered.

Sometimes I see lists floating around of insurers who cover SRS. I wouldn’t trust any such thing. You need to read your own policy, since policies are customized for each policy holder. Just because Aetna covered one person’s surgery doesn’t mean yours will be, too. My employer’s insurance company does pay for SRS if the original policy has been written to include it. However, since my employer did not pay the additional premium, I was outta luck. Now that I’m done, I might consider lobbying for them to change it.

Bottom line: don’t count on insurance to cover anything until that check is in your hot little hand.

Insurance premiums

Another thing to see is if you can get lower car and health insurance premiums once you’ve made legal changes to female.


Despite naysayers among us, some people have deducted their transition expenses under medical. Jill writes:

I got ALL my transition expenses refunded. I put in for facial surgery, electrolysis, hormones, therapy, insurance deductibles, everything. I may have gotten lucky or slipped under their radar. I don’t want you to think you definitely can too, but I got a really good tax advisor, paid him $200, and waited for those refund checks to roll in. Here’s how it works:

The IRS expects you will need 7% of your income for medical expenses annually. They don’t tax you on anything you spend above that. I make $30,000, so my medical deductible is $2,100. My tax rate is 28%, so any medical expense beyond $2,100 is refunded at 28%. Obviously, your medical deductible and tax rate are different depending on how much money you make.

Here’s how it looked on my Form 1040 (you can’t do this with the E-Z form):

  • Medical deductions were made on line 35
  • Line 35 was itemized separately on a Schedule A form
    • Schedule A form
      • Total medical expenses went on line 1
      • (that included any TS thing I could think of)

This is how it broke down that year:

Medical procedureCost
Psychotherapy deductible300.00
Blood work400.00
Prescription copay360.00
Preoperative electrolysis5,000.00
Hairline feminization2,500.00
Nasal reconstruction8,000.00
Less deductible–   2,100.00
Costs above deductible14,460.00
Refunded at 28%x        0.28
Refund from IRS4,048.80
Actual final total12,511.20

Jill got even more back the next year, since she had SRS. She says, “I don’t know about the precedent. I tried it, thinking that since medical insurance will sometimes cover such expenses, they must be considered legitimate medical deductions. Again, I may have gotten lucky, but so far so good! The next year was like “buy a sex change and get free implants!”

As Jill points out, there are no guarantees that things will go as smoothly for you, but it can’t hurt to try!

In 2002 I got the following from K:

I have also been successful deducting my transitioning cost on my federal tax return. As an example, I have outlined the critical numbers from my tax return for the year that I had facial feminization surgery (FFS) with Dr. O. I prepared my tax return using a standard over the counter tax preparation software package, and form 1040 with itemized deductions (form Schedule A). 

My gross income for said year was $105,300.00. Medical deductions were made on line 36 of form 1040, and the information for line 36 was itemized separately on the Schedule A form. Total medical expenses for my FFS appeared on line 1 of Schedule A. Below are the details:

FFS $32,500.00
FFS & other deductions $36,800.00
Taxable income less deductions $68,500.00
Total taxes paid at 33% $22,600.00
Refund from IRS $7,100.00

Bottom line: don’t count on a tax refund until that check is in your hot little hand.

Next: Common pitfalls

Disclaimer: This is financial talk, not financial advice. Some of this may not apply to you. It is presented without warranty. It may contain errors or omissions. You must do your own research.