Deduct Your Medical Expenses

If you're reading this, you may already know that infertility treatment is not covered adequately by most health insurance plans. If you are a tax-paying resident of the United States, there's something you can do to offset this injustice! You may be able to deduct the hundreds (thousands?) of dollars that infertility has cost you from your federal income taxes.

You do not need to be a financial mastermind nor do you need to hire an accountant to deduct your medical expenses. You do have to be organized; being organized made me feel more in-control of the whole situation. You also need to be able to itemize your deductions. I have used several online tax preparation applications, and deducting medical expenses was as simple as entering a few dollar amounts (I think these were categorized as transportation, prescriptions, treatment, etc.) The 2008 paper tax form provided by the IRS simply asks for one value "Medical and dental expenses".

You should be able to deduct the cost of tests, treatment (including acupuncture), over the counter medications, prescription medications, home pregnancy tests, insurance premiums, mileage (to and from your many appointments), and hotels (if you had to travel for treatment).

For more details on what can be deducted, go to www.irs.gov, and search for the current copy of publication 502. This document explains everything you need to know about deducting your medical expenses from your taxes. Here's the 2008 version of publication 502. You should make a note of the current standard mileage rate (for 2008, it is 19 cents per mile from January 1 through June 30 and 27 cents per mile from July 1 to December 31). Also check the list of what medical expenses can be deducted. If you traveled to a fertility clinic away from home, make note of the allowable deduction for hotel stays; in 2008, you can deduct up to $50/night per person for hotel stays.

The first thing you should do is to start tracking all of your expenses. I did this in a spreadsheet (I will try to provide a template version that you can use, so check back later). This may sound like a tedious task, but it's a manageable one if you can remember to make an entry in your spreadsheet when you return from each appointment. A spreadsheet like this allows you to easily track the miles you travel to and from each appointment. Designate a special place (a folder, basket, or box) in your house or workplace to store your medical receipts.

The IRS recommends that you keep the following information: the name and address of person you paid and the amount and date of each payment. Invoices are more helpful than simple credit card receipts, since they show the information the IRS wants you to track (what medical care was received, who received the care, and who the expenses were for). To simplify your life, ask your medical providers and your pharmacies for a report of your medical expenses for the calendar year. You can do this at the end of the year, just to make sure you've captured each expense.

Unfortunately, you can only deduct expenses that exceed 7.5% of your annual income. Since this is the case, it is helpful to file your taxes separately (instead of jointly). I have heard of people timing treatment so that it falls within a certain year for tax purposes (to exceed this 7.5% limit, for example). So, maybe you don't want to take a month off from treatment, if you can squeeze one more cycle into the calendar year.

Tip: If you are taking an over-the-counter prenatal vitamin, you may ask your doctor to prescribe one for you, since your prescription co-pay may be less than the over-the-counter cost...plus the cost will be tax deductible.

If you are participating in an FSA or HSA program through your employer, you will not be able to deduct costs that you have already submitted to your FSA or HSA administrator for reimbursement.

Deducting your medical expenses is just another way to feel more empowered when facing infertility. Infertility is not fair. Take advantage of the little things. You can do it!

Please note, that I am by no means an expert on federal income taxes. If you have any questions, please discuss them with your accountant.