For many individuals and couples undergoing in vitro fertilization (IVF), the financial burden can be significant. Fortunately, the IRS allows for medical expense deductions that can help offset some of these costs. This guide will explain how IVF medical expenses and tax deductions work, key terms to understand, and an example calculation to help you determine your potential tax savings.
Disclaimer: This article is for educational and informational purposes only and should not be considered financial or tax advice. Tax laws and regulations may change, and individual circumstances vary. Before making any tax-related decisions or filing your return, consult a qualified tax professional to ensure compliance and maximize your potential deductions.
Understanding Medical Expense Deductions
The IRS allows taxpayers to deduct qualified medical expenses that exceed 7.5% of their Adjusted Gross Income (AGI). IVF is considered a qualified medical expense under IRS Publication 502, meaning that certain costs associated with treatment can be included in your deductions.
What Is Adjusted Gross Income (AGI)?
Your Adjusted Gross Income (AGI) is your total gross income (wages, dividends, business income, etc.) minus adjustments such as student loan interest, retirement contributions, and educator expenses. This figure is found on your tax return and serves as the basis for calculating medical expense deductions.
What IVF Costs Are Deductible?
The following IVF-related expenses can typically be included in your medical deductions:
Medical consultations, diagnostic tests, and lab work
Fertility medications prescribed by a doctor
Egg retrieval, embryo transfer, and associated procedures
Anesthesia and surgical costs
Medical-related transportation expenses, including parking and mileage (21 cents per mile for 2024)
Storage fees for eggs, sperm, and embryos (if they are for immediate medical use)
However, expenses related to surrogacy (such as compensation for a gestational carrier or medical expenses for the surrogate) are not deductible since they are not for you, your spouse, or your dependent.
Example Calculation: A Couple Undergoing IVF in 2024
Let’s look at an example of how medical deductions might work for a couple undergoing IVF:
A couple has a household income of $125,000 (AGI) and for 2024. They had $32,000 in IVF-Related medical expenses.
Based on this, the threshold for deductible expenses would be $9,375.
(7.5% of AGI = 0.075 × $125,000 = $9,375)
To calculate the deductible portion of their medical expenses If they choose to itemize, they would take their total medical expenses of $32,000 and subtract the non-deductible portion ($9,375) to get a total of $22,625
This means the couple can deduct $22,625 as an itemized medical expense deduction.
It is also important to note that the couple can also add eligible transportation expenses, such as:
Mileage driven for IVF-related medical appointments
Parking fees and tolls associated with medical visits
For example, if they drove 2,000 miles for all of their IVF appointments in 2024, at 2,000 miles × $0.21 per mile, they can add an $420 in additional deductible expenses to their total medical expenses and costs.
The Importance of Being Informed
Understanding the tax implications of IVF can help lessen the financial burden of treatment. By keeping thorough records of all medical expenses, prescriptions, and transportation costs, couples can maximize their deductions and potentially reduce their tax liability. Grain Fertility's application and medical expense tracking sheet help make it easier than ever to keep all of this organized.
All Grain Fertility members have access to these tools, but if you’d like a free copy, simply schedule a free discovery call with one of our Patient Empowerment Coaches and we will provide you with a free download of our Grain Fertility Medical Expense Tracking Worksheet.
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