Being pregnant and having a baby is expensive — between medical bills, supplies and, you know, actually raising a human being, costs really add up. But hold onto those receipts, because a lot of the necessities you're spending on are tax-deductible. (Although the rules below will be subject to change with the new tax bill coming into effect next year, they're still applicable for 2017 tax returns.)
The Internal Revenue Service allows a deduction for medical expenses — including preggo expenses — for taxpayers who itemize on a Schedule A.
You can deduct qualified medical expenses that exceed 10 percent of your adjusted gross income for the year according to TurboTax. What's your adjusted gross income? It's your taxable income minus any adjustments to income, such as deductions, contributions to a traditional IRA and student loan interest.
So, if you have a modified adjusted gross income of $30,000 and have $8,000 in medical expenses, you would multiple $30,000 by 0.10 (10 percent) to find that only expenses exceeding $3,000 can be deducted. This leaves you with a medical expense deduction of $5,000 ($8,000 - $3,000).
What are qualifying medical expenses? Generally, qualifying medical expenses include preventative care, treatment, surgeries (such as a C-section) and dental and vision care.
If you are seeing an OB-GYN throughout your pregnancy, one thing you can count on is a lot of doctor's appointments. The cost of your visits is deductible to the extent that you pay out of pocket; any costs that are reimbursed to you or are paid by your insurer are not deductible.
Also deductible? The cost of getting to and from those visits, whether by car, public transit or taxi — and even parking. You’ll need to be able to document these expenses, though, so get receipts and keep good records (a mileage log is particularly helpful if you drive to your medical appointments).
Even with a normal, healthy pregnancy, you'll be getting some tests done — including blood work and the glucose tolerance test. These are also deductible as long as they are ordered by your doctor as part of your prenatal care. Similarly, tests to determine potential birth defects or other abnormalities, including maternal serum tests, hCG testing, chorionic villus sampling or amniocentesis are also deductible.
During the later stages of pregnancy and during labor, your doctor may order fetal heart monitoring to check the rate and rhythm of the fetal heartbeat. Again, as long as these tests are ordered by a doctor for medical reasons, they are tax-deductible.
Your doctor will also usually schedule an ultrasound between 18 to 20 weeks to check the growth of the fetus and the location of the placenta and to determine any potential problems. The cost of this ultrasound, to the extent it's not covered by health insurance, would be deductible as a medical expense.
Around that same 18- to 20-week mark, it’s also sometimes possible to determine the sex of your baby. Of course, depending upon how cooperative said baby is, the ultrasound may be inconclusive. Since most medical professionals will only prescribe an ultrasound when it's medically necessary, it’s generally unlikely that your doctor will schedule another ultrasound simply to determine the baby's sex.
Some parents are, of course, pretty anxious to find out the sex and may schedule a private ultrasound outside their regular medical care. Know that you may not deduct the cost of a private ultrasound like this if it is not deemed a medically necessary part of prenatal care. The same rule applies to those extra ultrasounds, such as the 4-D, which parents often request just for fun (and photos).
As your pregnancy progresses, you'll likely need a few different (i.e., bigger) clothing items. But even though maternity clothes are often a pretty necessary part of being pregnant, they are specifically excluded as a deduction by the IRS. *Sigh*
As your pregnancy progresses, you may also find you are in need of extra assistance around the house. You cannot deduct the cost of household help such as a cleaner — nope, not even if such help is recommended by a doctor. It’s still considered a "personal expense" that is not tax-deductible. However, to the extent that your doctor orders actual nursing care for you in-home, those expenses are indeed deductible.
And despite the obvious dilemma facing parents of small children who are about to have yet another baby, you cannot include when deducting "medical expenses" the amounts that you pay for the care of children, even if those expenses are strictly to allow you to go the doctor or to the hospital for medical care.
You can deduct the cost of preparing for delivery via childbirth classes. Again, to the extent that you are reimbursed by your insurance company (many will give you a refund if you attend a certain number of classes), you must exclude the reimbursement from your overall medical expenses.
What about supplies for your new baby? Effective as of the 2010 tax year, the IRS has ruled that taxpayers may use pretax dollars in their FSAs (flexible spending accounts) to cover the cost of breastfeeding supplies. If you don’t have an FSA, breastfeeding supplies are considered deductible as a medical expense. Breastfeeding supplies or “supplies that assist lactation” include breast pumps, bottles and pads.
However, be careful: Infant formula is not deductible, even if you can’t (or don’t wish to) breastfeed. The IRS considers infant formula to be nutrition, like food for grown-ups, and therefore it's not deductible.
Other supplies — such as diapers (or the cost of a diaper service), diaper cream and baby shampoo — are likewise not deductible. They are considered personal supplies rather than medical.
And of course, once you go into labor, the cost of the hospital stay, doctor and nursing care, medications, ultrasounds and other monitoring are all considered medical expenses for the purpose of claiming a deduction. Even if you opt to use a birthing center, the same rules apply.
And at the end of the whole pregnancy and birth process, you get a little bundle of joy... and an extra personal tax exemption!
A version of this article was originally published in March 2013.
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