A key element in minimizing your out-of-pocket medical expenses and maximizing your tax refund rests with your ability to shift some of your medical costs to the government. According to WebMD, the average cost of one round of in vitro fertilization (IVF) treatments is $12,400. However, including the uncovered portion of your treatments as medical deductions could drastically reduce your out-of-pocket expenses.
Definition
Since deductions reduce the amount of your income that is subject to tax, deductions are an essential element of any successful tax strategy. The IRS defines medical expenses as the costs incurred to diagnose, treat, prevent or cure an illness and allows taxpayers to deduct the costs associated with these medical services. In addition to the cost of medical care itself, costs associated with equipment and supplies are also deductible. Medical costs also include the amount you pay for insurance to cover the treatment as well the amount you pay for transportation to get to a treatment facility.
Eligibility
In most instances, you can include medical costs for yourself, your spouse or any dependents for whom you are eligible to claim as tax deductions on your income tax return. To qualify to include your spouse's expenses, you must have been married at the time your spouse received IVF treatment or at the time you paid for the treatment.
Deductibility
Include in your medical deductions any amount you paid for in vitro fertilization or storage of sperm or eggs. You can also deduct the amount of a surgery if the purpose of which was to reverse a condition that prevented you from conceiving a child. To figure your total deduction amount, complete lines 1 to 4 on Schedule A of Form 1040. Only deduct those amounts that were not reimbursed by your insurance company.
Restrictions
You are only allowed to deduct the costs of your medical expenses that are in excess of 7.5 percent of your adjusted gross income. In addition, you cannot deduct any amount for which you are reimbursed by your flexible spending account, the cost of future medical care, health club dues or nutritional supplements such as herbs or vitamins. Include only medical deductions you paid during the year.
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