Tax Time!

Tips on Taming the Financial Monster of Infertility Treatment

Since most folks in the United States do not have insurance coverage for fertility treatment, we're always on the lookout for other ways to handle the expenses of our infertility journeys. For many, one of those ways is through understanding your tax-related options.

Use Flexible Spending Accounts

Many employees, especially of larger companies, have access to flexible spending accounts for health expenses. These programs allow an employee to determine a set amount of their income to be withheld from their paycheck and placed in an account to use for medical expenses only. You can use the funds for co-pays or other out-of-pocket expenses not covered through insurance. There are limits to the amounts that you can request be held, and you must use the money in the account within a year's time, so planning ahead is crucial here.

The tax advantage is that the money accrues in the account pre-tax from your income, so in effect, it's tax-free income.

Deduct Expenses

If an expense is deemed "deductible," then factoring it in to your income tax returns can save you money. The good thing is that many health expenses (yes, even for fertility issues) are deductible! Here are a few of the possible deductible health-related expenses:

  • health insurance premiums paid by you, not your employer
  • any cost to you for treatment of a medical condition, including most physician appointments, procedures, and drugs
  • counseling costs related to your medical treatment
  • travel and lodging to obtain medical treatment

The general rule is that if you have medical expenses that are more than 7.5% of your adjusted gross income, you can claim those expenses as a deduction.

File Itemized Tax Returns

In order to make use of the available allowed deductions, you must itemize your returns. In short, that means you cannot use those easy, short forms. You'll be using the Form 1040 plus Schedule A (which helps calculate your deductible expenses).

Even for married couples who have always filed joint returns, it may benefit you to file separately if one person has over the past year incurred a lot of deductible expenses.

Seek Qualified Advisors

Tax laws can change, and it's hard for the average consumer to keep up with the lastest rules. These rules can directly impact how you file your income tax. The easiest way to be sure that you're taking advantage of all the possible avenues for deductions is to use a qualified tax advisor.

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Hallie - 10 months ago
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This is slightly outdated information. The rule for deductibility of health expenses has changed for Tax Year 2013 (meaning expenses incurred in 2013 and filed on your taxes in 2014). http://www.irs.gov/Individuals/2013-changes-to-itemized-deduction-for-medical-expenses #1