Fertility treatments, such as in-vitro fertilization (IVF), can be expensive and overwhelming. Fortunately, there are tax deductions available to help cover some of the costs associated with IVF treatments. In this article, we'll discuss everything you need to know about tax deductions for IVF treatments, including eligibility requirements, deductible expenses, and how to maximize your tax savings. We'll also provide information on payment options for IVF, so you can find the best way to pay for your treatments and get the most out of your tax deductions. By the end of this article, you'll have a better understanding of how you can save money on IVF treatments and make the most of your tax return. When it comes to taxes and IVF, there are two types of deductions you may be able to take advantage of: medical expenses and adoption expenses.
Medical Expense Deductions: Medical expenses associated with IVF treatments that may be deductible on your taxes include: doctor fees, fertility drugs, egg retrieval and fertilization fees, and storage fees for embryos. You can deduct the amount of money you paid for all of these expenses if it exceeded 7.5 percent of your adjusted gross income (AGI). For example, if you had an AGI of $50,000 in the year you underwent IVF treatments, you can deduct any medical expenses over $3,750. Adoption Expense Deductions: Adoption expenses associated with IVF treatments can also be deductible on your taxes.
This includes adoption agency fees, legal fees, medical costs, and travel costs associated with the adoption. To qualify for the adoption tax credit, you must be adopting a child who is not a relative. The maximum credit is $14,080 per child in 2021. To claim either deduction, you’ll need to complete Form 1040 Schedule A (Itemized Deductions) and include your receipts or other documentation as proof of purchase. It’s important to note that tax deductions are different than tax credits. Tax deductions reduce the amount of income subject to taxes while tax credits reduce the amount of taxes you owe.
It’s also important to note that if you take an itemized deduction on your taxes, you cannot take the standard deduction as well. You must choose one or the other. Before deciding which one to choose, it’s best to consult a tax professional or use a tax preparation software to determine which option is best for you.
What Are Tax Credits?
Tax credits are different than tax deductions in that they reduce the amount of taxes owed instead of reducing the amount of taxable income. For example, the Adoption Tax Credit mentioned above can reduce the amount of taxes owed by up to $14,080 per child adopted through IVF.Other types of tax credits include the Child and Dependent Care Credit and the Earned Income Credit. In conclusion, tax deductions and credits can help reduce the cost of IVF treatments. Be sure to consult a tax professional or use a tax preparation software to determine which option is best for you before filing your taxes. This way, you can ensure you are taking advantage of all available tax deductions and credits to lower the cost of IVF.
