Can I Claim IVF Expenses on My Taxes?

Understanding Medical Expense Deductions

Claiming a deduction for medical expenses on federal income tax returns involves specific rules. Taxpayers can deduct only the amount of medical expenses exceeding 7.5% of their Adjusted Gross Income (AGI).

Adjusted Gross Income (AGI) is a taxpayer’s gross income minus certain deductions, such as IRA contributions or student loan interest. For example, if a taxpayer’s AGI is $100,000, only medical expenses over $7,500 ($100,000 x 7.5%) can be deducted.

To deduct medical expenses, taxpayers must itemize their deductions instead of taking the standard deduction. Itemizing involves listing specific deductible expenses, which include state and local taxes, mortgage interest, and charitable contributions, in addition to medical costs. If total itemized deductions are less than the standard deduction for your filing status, claiming medical expenses may not provide a tax benefit.

Qualifying IVF Expenses

Many expenses associated with In Vitro Fertilization (IVF) are qualifying medical care costs. These encompass payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body.

Medical procedures directly related to IVF are deductible. These include consultations with fertility specialists, diagnostic tests like hormone level checks or ultrasounds, and the actual procedures of egg retrieval and embryo transfer. Payments to hospitals, fertility clinics, and laboratories for these services qualify, as do fees for cryopreservation of eggs, sperm, or embryos intended for future medical use.

Prescription medications, including fertility drugs and hormones, are deductible. Over-the-counter medications are not deductible unless prescribed by a doctor. Laboratory fees for tests and processing of biological materials for the IVF cycle are also qualifying expenses.

Certain travel costs primarily for medical care, including IVF treatment, are deductible. This includes mileage, parking fees, and tolls for appointments. Lodging expenses while away from home for medical care are also deductible, limited to $50 per night per person.

Non-Qualifying IVF Expenses

While many IVF-related costs are deductible, certain expenses do not meet Internal Revenue Service (IRS) criteria. These non-qualifying expenses are typically not for medical treatment or are considered personal.

General health supplements, vitamins, or over-the-counter medications are not deductible unless prescribed by a physician for a specific medical condition. Non-medical surrogacy fees, such as payments to a surrogate for her time, are not deductible. Only medical expenses incurred by the individual receiving the medical care are deductible.

Travel costs not primarily for medical care do not qualify. This includes meals during medical travel, as meals are not medical expenses. If a trip combines medical appointments with personal activities, only the medical portion of travel expenses is deductible. Childcare expenses are generally considered personal and are not deductible as medical costs.

Required Documentation

Maintaining meticulous records is necessary for substantiating medical expense deductions, including those for IVF. The IRS requires taxpayers to prove claimed expenses in an audit. Organized documentation simplifies this process and ensures deduction validity.

Detailed receipts and invoices from medical providers are required, showing date, service, amount, and provider name. For prescription medications, keep pharmacy receipts listing drug name, dosage, date, and cost. Retain proof of payment, such as bank or credit card statements, to corroborate expenses.

Explanation of Benefits (EOB) statements from your health insurance provider are important. EOBs detail services covered by insurance, amounts paid by the insurer, and your responsible portion. This helps determine your out-of-pocket expenses, which are the only amounts eligible for deduction. For travel, maintain mileage logs and receipts for parking, tolls, and lodging, noting dates and medical purpose.

Claiming the Deduction

Once qualifying IVF expenses are documented, the process of claiming the deduction begins on your federal income tax return. This involves itemizing deductions on Schedule A (Form 1040), rather than taking the standard deduction. Taxpayers must choose the method that results in the lowest tax liability.

On Schedule A, qualifying medical and dental expenses are reported. You will sum all your documented out-of-pocket medical expenses, including those for IVF, and enter the total. The IRS then applies the Adjusted Gross Income (AGI) limitation, allowing deduction only for amounts exceeding 7.5% of your AGI.

The deductible amount, if any, is then added to your other itemized deductions, such as state and local taxes, mortgage interest, and charitable contributions. The total of these itemized deductions is then carried over to your main tax form, Form 1040. This final amount reduces your taxable income, potentially leading to a lower tax obligation.