Your guide to the IVF tax deduction. If you paid for infertility treatment in 2022, find out how much of the cost you can deduct on your taxes.
Anyone who’s paid for in vitro fertilization knows that it is extremely expensive and often costs much more than what you estimated going in.
Most sources online will say that the cost of IVF is around $15,000 for a cycle but once you factor in IVF medications, embryology add-ons such as ICSI or PGT-A, and a fresh embryo transfer, we’re looking at upwards of $20,000.
And that’s not even counting the cost of a frozen embryo transfer (FET).
If you paid a lot of your IVF expenses out-of-pocket last year for fertility treatment, then you may be able to take advantage of deducting a hefty amount on your taxes to help you get a better return.
If you plan on going this route, make sure to consult a tax professional to ensure you are covering all your bases for submitting correctly, have documentation for audit purposes, and get the best possible return for yourself.
Let’s dive into how much you can deduct, how you can deduct, and who it makes sense for.
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How much of your IVF costs can you deduct on your taxes?
It depends! You need to know your adjusted gross income and the amount you paid for treatment.
You can write-off eligible medical expenses, such as IVF, that exceed 7.5% of your adjusted gross income.
For example, let’s say you are filing as single and your adjusted gross income is $65,000 for the year. We’ll calculate 7.5% of that number to get $4,975.
Any amount of money you paid for medical expenses above $4,975 can be written-off on your taxes! So in this case, the first roughly five grand can’t be deducted, but all that money you paid above that amount can be deducted.
Using the threshold above, if you paid $20,000 for IVF costs that tax year, you can write-off $15,025 in medical expenses! 🙌
The same rule applies if you’re married filing jointly. The most recent statistics for the average adjusted gross income for couples married filing jointly we could find is $117,795, so we’ll round up to $120,000 for our example.
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How to calculate your IVF deduction amount for your taxes
Here’s the math so you can sub in your own numbers:
Step 1 - Calculate 7.5% of your Adjusted Gross Income (AGI)
Adjusted gross income * 0.075 = write-off threshold
Example: $120,000 * 0.075 = $9,000
Step 2 - Calculate your IVF costs that exceeded 7.5% of your AGI
Eligible medical expenses - write-off threshold = amount you can deduct on taxes
Example: $25,000 - $9,000 = $16,000
So, depending on your adjusted gross income and how much you actually paid for treatment during that tax year, you may be able to deduct a fairly large amount on your taxes.
Not a fan of doing math? Don't worry, we made you an IVF expenses deduction tool that calculates what your deduction amount would be and helps you track your expenses in preparation for filing your taxes.
It's honestly a pretty handy tool even for keeping track of all your fertility treatment receipts!
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Can I deduct my IVF expenses on my taxes?
To figure out if your specific expenses are eligible, the IRS has a handy tool where you can take a short quiz to find out.
You have to answer some questions about:
- what year the expenses were paid
- who paid the expenses
- who the expenses were for (who had treatment)
- your filing status
- adjusted gross income
It will then let you know if your expenses would be eligible to deduct for that tax year!
A little tip, when they’re asking you what type of medical expense your IVF treatment falls under, they refer to it as a ‘Fertility Enhancement Expense’.
You'll need to know your numbers to calculate whether deducting uninsured medical expenses for infertility treatment will be advantageous to you. Compare the amounts for your standard deduction vs itemized deduction. Choose whichever is bigger to get the largest tax write-off!
Itemized deduction vs Standard deduction
Something to keep in mind is that in order to benefit from writing-off IVF costs on your taxes, you have to itemize your deduction for the year instead of taking the standard deduction.
The most recent tax data shows that for the 2018 tax year, only 11.4% of returns were itemized, while the majority of tax returns used the standard deduction. This was slightly higher when looking specifically at married couples filing jointly, with 15.8% of tax returns itemizing deductions.
For most people, the standard deduction will give them a better return so they won’t want to itemize deductions for the purpose of writing-off medical expenses.
If you had a lot of medical expenses, you may want to run the numbers to compare whether your standard deduction amount or itemized deduction amount is higher. Then go with whichever number is bigger so you can get the largest write-off.
Standard Deduction Amounts for 2022 Tax Year
Filing Single - $12,950
Married Filing Jointly - $25,900
Couples or individuals who paid for multiple treatments in a year, such as two IVF cycles or one IVF cycle with several frozen embryo transfers would likely benefit from itemization, depending on their adjusted gross income.
Itemized deductions also allow you to include expenses such as mortgage interest or real property taxes paid on your home.
So if you have these home-related costs and paid a large amount in medical expenses for the tax year, your itemized deduction amount could be higher than the standard deduction, in which case you’d want to take advantage of itemizing.
A good rule of thumb is that, if your medical expenses were high and your adjusted gross income is low, you’d be likely to get a better tax return by itemizing and deducting medical costs.
If you keep track of your receipts, a year of infertility treatment could add up to a huge amount of money that can exceed the standard deduction amount.
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Which fertility treatment costs are eligible medical expenses for tax deduction?
The IRS refers to IVF expenses as falling under Fertility Enhancement and eligible for deducting as a medical expense, stating:
“You can include in medical expenses the cost of the following procedures performed on yourself, your spouse, or your dependent to overcome an inability to have children.
Procedures such as in vitro fertilization (including temporary storage of eggs or sperm).
Surgery, including an operation to reverse prior surgery that prevented the person operated on from having children.”
So that’s pretty broad! Any expenses that fall under costs for IVF including temporary egg or sperm storage are eligible for deduction.
Additionally, there are other eligible medical expenses that can be part of an itemized deduction that many IVF patients may have also paid for.
In addition to IVF, eligible medical expenses include:
- prescribed medications
- acupuncture
- operations that are not cosmetic
- birth control pills
- pregnancy test kits
OK, the birth control pill and pregnancy test costs aren’t likely to really bump your return up very much but being able to include acupuncture, medications and any operation expenses may really help!
Tool to help you track IVF expenses & calculate your deduction
Considering running the calculations to see if your IVF expenses could save you money on taxes?
We made you a spreadsheet template that will calculate it for you!
Just enter your:
- adjusted gross income
- filing status
- costs of your expenses
You can use this tool to track your IVF expenses and estimate whether itemizing your medical expenses on your taxes would be advantageous for you.
You can access it for free here.
Based on these numbers, our calculator tool will automatically calculate whether your standard deduction or itemized deduction is shaping up to be bigger.
Our IVF expense tracking template can help you to figure out whether deducting your fertility treatment costs could benefit your tax return.
This is a good tool to use throughout the year to help you keep track of your IVF costs as you go so that once tax time comes, if you do think you’ll be itemizing your deduction, you’ll already have all of your costs and receipts recorded in one place!
We hope this is helpful for you! Remember, to always keep track of your receipts in the second tab of the spreadsheet to make sure that you can track your expenses and have proof of cost.
This is just a helpful estimate for medical costs based off the information you put in, so keep in mind that you may have other deductions besides medical expenses with their own rules for how they can apply to your itemized deduction.
We added a section for other common deductions people itemize but you should check on the IRS website or speak with a tax professional to make sure you’re doing everything exactly right with other deductions! There are usually thresholds for the amount of expenses a deduction can be for things such as mortgage interest for example.
Are you doing the standard or itemized deduction?
We hope this tax year is a breeze and that you’re able to use this information to make sure you get the maximum refund by checking which deduction method works best for you!
Tax tip for business owners
Tax accountant, Barabara Schreihans suggests, "If you are a business owner, you may be able to set up an accountable plan which would reimburse you for medical expenses.
This essentially would make your IVF and other related treatments a business deduction and could save you thousands of dollars in taxes."
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