It is almost tax time!
Many health expenses, including those related to fertility treatments, are deductible. Take an itemized deduction on your personal income tax return. Many health expenses, including those related to fertility treatments, are deductible. Take an itemized deduction on your personal income tax return.
Only people who itemize deductions can claim the medical expense deduction.
For 2020 and previous years, you can deduct medical expenses that exceed 7.5% of your adjusted gross income (AGI).
Starting 2021, the medical expense deduction will only apply to expenses that exceed 10% of your income. Although there has been discussion it may remain at 7.5% next year.
✅ Health insurance premiums are deductible if you paid them out of pocket with post-tax money.
✅The medical expense deduction allows you to deduct certain out-of-pocket medical and dental expenses on your annual tax return. You can only claim expenses that you paid during the tax year, and you can only deduct medical expenses that exceed 7.5% of your adjusted gross income (AGI) in 2020.
✅So, if your AGI is $50,000, then you can claim the deduction for the amount of medical expenses that exceed $3,750. In 2021, the medical expense deduction will only cover expenses that exceed 10% of your income.
Here is an example for 2020:
· Income is $50k
· 7.5% of AGI is $3750
· Total medical expenses are $11k.
· Amount of deduction is $7250
Who can itemize deductions? You should only itemize if your total itemized deductions are worth more than your standard deduction. The standard deduction is available to all taxpayers and seek the advice from your accountant to learn exactly how much. Keeping receipts in this journey is key to be able to itemize your deductions.
To start your list:
-Lab Fees
-Fertility Procedures & diagnostic testing costs
-Surgery (Hospital/Outpatient Surgery Center)
-CoPays
-Prescription Medications