Can You Write Off IUI Expenses on Your Taxes?
Demystify the tax deductibility of IUI fertility expenses. Gain clarity on IRS requirements, eligible costs, and the steps to optimize your tax return.
Infertility treatments, such as Intrauterine Insemination (IUI), represent significant medical and financial considerations for many individuals and couples. While the costs can be substantial, certain expenses related to these treatments may be eligible for tax deductions under specific Internal Revenue Service (IRS) rules. Navigating these rules requires understanding general medical expense deductibility requirements and how they apply to fertility care. This article provides guidance on identifying qualifying costs and the process for claiming these potential deductions on a tax return.
General Rules for Deducting Medical Expenses
Taxpayers may deduct medical expenses that exceed a certain percentage of their adjusted gross income (AGI). For most tax years, this threshold is 7.5% of AGI. Adjusted gross income is a taxpayer’s total income minus certain deductions, such as contributions to a traditional IRA or student loan interest.
To claim medical expense deductions, taxpayers must itemize their deductions on Schedule A (Form 1040). Itemizing involves listing specific deductible expenses, as opposed to taking the standard deduction, which is a fixed dollar amount based on filing status. A taxpayer should choose to itemize only if their total itemized deductions, including medical expenses, exceed their applicable standard deduction amount.
The IRS defines medical care as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. Expenses can be claimed for the taxpayer, their spouse, and qualifying dependents.
Specific IUI Related Costs That Qualify
Many specific costs associated with IUI treatments are considered qualifying medical expenses by the IRS. Direct medical costs generally include fees for doctor visits, diagnostic tests, and necessary fertility medications. This also extends to the IUI procedures themselves, which may involve sperm washing and insemination, along with associated lab fees.
Beyond direct treatment, certain related expenses can also be deductible. Travel costs to and from medical appointments, including IUI treatments, can be included. This can cover mileage at a standard medical rate, which is 21 cents per mile for 2025, in addition to tolls and parking fees. Expenses merely beneficial to general health, non-medical travel, or cosmetic procedures unrelated to a medical necessity do not qualify for deduction.
Preparing to Claim Your Medical Expense Deduction
Record-keeping is important when preparing to claim a medical expense deduction. Taxpayers should gather and retain all relevant documentation, such as receipts, invoices, and Explanation of Benefits (EOB) statements from insurance providers. These records substantiate the expenses and help accurately calculate the deductible amount.
After compiling all documentation, the next step involves calculating the total qualified medical expenses for the tax year. Only expenses not reimbursed by insurance or other sources should be included in this total. From this sum, the Adjusted Gross Income (AGI) threshold is applied to determine the deductible portion. For example, if a taxpayer’s AGI is $50,000, 7.5% of that is $3,750, meaning only expenses exceeding $3,750 would be deductible.
Taxpayers must decide whether itemizing deductions, including medical expenses, offers a greater tax benefit than the standard deduction. This involves comparing total itemized deductions against the standard deduction amount for their filing status.
Claiming the Deduction on Your Tax Return
After preparing, the deduction can be claimed on the tax return. The calculated deductible medical expenses are reported on Schedule A (Form 1040), Itemized Deductions. These expenses are entered on Line 1 of Schedule A.
Schedule A provides a structured approach where the total qualified medical and dental expenses are first listed. The form then guides the taxpayer to enter their Adjusted Gross Income, followed by 7.5% of that AGI. The difference between the total expenses and the 7.5% AGI threshold is the deductible amount, which is then added to any other itemized deductions on Schedule A.
The total itemized deductions from Schedule A are subsequently transferred to the main Form 1040. This transfer reduces the taxpayer’s taxable income, potentially lowering their overall tax liability. When using tax preparation software, the program automates these calculations and transfers; for paper filers, careful adherence to form instructions is necessary.