Year-End Receipts for Fertility Treatments
Saving Receipts Can Save You Money
Whether you’re just starting fertility treatment or you had treatment in the past two or three years, saving your receipts may save you money by reducing your income tax expense. It’s true! Many people will be able to use the IRS rule that allows you to deduct medical expenses that exceed 10 percent of your adjusted gross income when you itemize on your Federal income tax return.
When you have fertility treatment, it’s worth it to save all your receipts for any kind of medical treatment and it may be worthwhile to itemize on your return. You can’t use the IRS short form, but the tax savings may make it worth your time to do the long form.
Many kinds of medical expenses that you pay out of pocket are eligible for deduction, including some you might not expect. 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. If you are self-employed or your insurance is not paid on a pre-tax basis through your employer, your health insurance payments may be deductible. All of these add up, and you can deduct the amount that exceeds 10 percent of your adjusted gross income. Ask your tax advisor and visit the IRS website http://www.irs.gov/publications/p502/ar02.html to see what qualifies.
Last Year’s Expenses
If you had fertility treatment last year, you may be just now getting the receipts for expenses you paid at the end of last year. Make sure to save these and use them to help you itemize your expenses! You can include receipts for expenses paid by credit card. Remember that you cannot include expenses that your health insurance paid or reimbursed you for. This IRS rule is for out-of-pocket expenses only. Be sure you have receipts for as many of your expenses through the end of December as you can find.
It’s Not Too Late to Re-File
What if you didn’t know about the possibility of a deduction, and you spent significant amounts of money on fertility treatment in years past? If you have the receipts for these expenses, you can file IRS form 1040X and file again to include those deductions. You have to file within three years of that return’s date that you want to amend or within two years of when you paid the taxes, whichever comes later.
Start Saving Receipts Now for Next Year’s Filing
If you are planning on having IVF or other treatments this year, make sure and save all your receipts as you go along. This will make it much easier to get the numbers together for next year’s tax return. Just throw them all in an envelope or a folder every time you get one. Be sure to include all your medical expenses that you pay out of pocket, including those for fertility treatment. If you keep a log of what treatment you have when, you’ll have the answers ready if the IRS should question why your medical expenses were higher than in previous years. It’s really helpful to plan ahead instead of having to backtrack and reconstruct what your expenses were.
Maintain Your Records
When you file an itemized return, make sure to save all your receipts, records, and tax returns for at least seven years. The IRS can ask you for more documentation of your return for seven years after you file.