For many couples with infertility, the cost of fertility treatment can make their dreams of parenthood seem out of reach. At NCCRM, we want all our patients to feel confident about their ability to grow their families, regardless of their financial situation or insurance coverage. That’s why we offer our patients access to as many financial tools as possible. Working with our financial coordinators, patients can learn the ins and outs of their insurance plans, our wide array of financial programs, and additional savings that may be available to them through tax deductions.
Patients may be able take advantage of an IRS rule that allows medical expenses that exceed 10% of their adjusted gross income to be itemized and deducted from their annual tax bill.
Itemizing medical deductions can result in a significant refund of the money patients pay for fertility treatment – making treatment more affordable than they might have imagined because they are paying with pre-tax dollars.
Use these five tips to make the most of the tax deductions allowed by the IRS for medical expenses:
1. Save every receipt.
Save all your invoices and receipts – even the ones you think you won’t need – because infertility treatments are just part of the total that may be deductible. Many patients are surprised to learn the types of expenses that may qualify. You should consult your tax advisor for specific guidance on your individual circumstances, but here is a list of expenses that you may be surprised to know are deductible:
- Laboratory fees
- Prescription medications
- Fertility treatment fees that are paid out-of-pocket.
- Travel expenses for trips related to medical care including mileage, tolls, parking, hotels, and meals.
For the most thorough and up-to-date information on deductibility of medical expenses, click here to go to the IRS website.
2. Keep a detailed log of expenses.
Keeping a detailed record of when each expense occurred is vital in the event you are contacted to verify your deductions. The IRS form where you itemize your deductions does not provide space for you to explain why your medical expenses are higher than usual. Therefore, you may be contacted by the IRS and asked to provide additional information to verify your deductions. The more accurate and detailed your records, the better prepared you will be to provide the information if requested.
3. Keep all of your records for seven years.
The IRS has the ability to request supporting documents for your tax returns for up to 7 years after you file them. Keeping your records and receipts during this period of time will allow you to provide the necessary documentation should it be requested.
4. Forget to write off your fertility treatment last year? It’s not too late!
If you had fertility expenses you didn’t deduct last year, you can file IRS form 1040X to amend previous tax returns to include your deductions. Form 1040X must be filed within 3 years from the date of your original return or within 2 years from the date you paid the tax, whichever is later.
5. Flexible Spending Accounts & Health Savings Accounts
Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) provide alternative ways for patients to pay for out-of-pocket medical expenses with pre-tax dollars. Employers who offer FSA/HSA plans allow employees to save a portion of their pay in an account specifically earmarked for medical expenses. This money is not taxed. If your FSA or HSA account is not large enough to cover all of your expenses, the remainder can still be itemized as deductions.
Whether you are still researching treatment, currently undergoing treatment or have already completed your treatment, the IRS’s rule on deducting medical expenses can help you. Itemizing medical deductions or using an FSA account will require some diligence and a little extra paperwork, but it may save you thousands of dollars in taxes.
Using these tips, along with the other programs provided by Shady Grove Fertility, can put fertility treatment – and your dreams of parenthood – within your reach.
*NOTE: Each patient’s circumstances are unique. Please consult with your personal tax advisor to determine how these deductibility rules may apply specifically to you.