Did you know that the costs of your fertility treatments may help you reduce your income tax payments? There is an IRS rule that allows medical expenses that exceed 10 percent of your adjusted gross income to be itemized and deducted from your annual tax bill. Fertility treatments are medical expenses. Here are some tips to help you take advantage of the rule and reduce your tax payments.
Itemize Your Expenses
If you want to take this deduction, you must itemize your expenses. File the 1040 long form, not the short form. If your medical expenses, including fertility treatment costs, exceed 10 percent of your adjusted gross income, the savings are worth the time it takes to do the long form.
Always Save All Your Receipts
Keep all your receipts for all medical treatment for yourself (and your spouse, if you are filing jointly,) not only your fertility treatment, because many kinds of medical treatment as well as fertility treatment qualify for the deduction. This includes co-payments and co-insurance, laboratory fees, prescription medications, fertility treatment fees that are paid out of pocket, such as IVF and other treatments not covered by your insurance, and even your travel expenses for trips related to your medical care. You’ll be surprised how fast this adds up.
Consult your tax advisor and visit the IRS website to see what qualifies. It all counts toward meeting the 10 percent of your adjusted gross income which is the threshold for deduction, and the amount above that threshold will be your deduction. If you’re just starting treatment, make it easy on yourself for next year. Keep a log of your expenses, and be sure to throw the receipts in an envelope or file folder. That way you won’t have to hunt for them when you’re ready to file next year.
You Can File Again
Did you have expenses for fertility treatments last year and you didn’t deduct them? You can file again using IRS Form 1040X to amend a previous year’s return. If your expenses exceeded the 10 percent threshold, it may be worth your while to amend the return. You must file within three years of that return’s date or within two years of when you paid, whichever comes later.
Flexible Spending Accounts and Health Savings Accounts
Your employer may offer flexible spending accounts (FSAs) or Health Savings Accounts (HSAs.) These accounts allow you to save a portion of your pay before taxes in order to pay for medical expenses. Saving pre-tax reduces your taxable income. If your FSA or HSA is not large enough to cover the entire cost of your fertility treatments, you can still itemize the remaining costs which you pay out of pocket.
Working Toward Your Future Family
Taking all the deductions you’re entitled to is one way to help make fertility treatment more affordable. WINFertility can help you lower the cost of fertility treatment with their lower than market-rate Treatment and Medication BundlesSM.
These Bundles combine medical services for a single IVF treatment and medications at a reduced “pay-as-you-go” price. Multi-cycle discount plans force you to pay for treatments you may never use in order to get a discount, and they don’t cover the cost of the medications, which are a major expense. Call 855-705-4483 (4IVF) to talk to one of our professionals and find the plan that’s right for you.