Can I Write Off Baby Expenses?

November, 22 2023 by Steve Banner, EA, MBA

Yes, you can. Provided that the baby in question is your dependent, there is a whole host of tax benefits you can take advantage of to offset your expenses. And here we’re talking not only about the expenses that occur around the time of the birth, but also before the birth and continuing into the child’s teen years and possibly beyond. But I’m getting ahead of myself here. I had best slow down and explain from the very beginning.

 

Let’s start with before the pregnancy begins.

If you’re having trouble getting pregnant, you can potentially deduct the costs of fertility treatments, such as in vitro fertilization (IVF), including the costs of temporary storage of eggs and sperm. You can also deduct the cost of surgery to reverse the previous surgery that prevented the woman from having children. Other expenses for fertility treatment, such as acupuncture and counseling, are also potentially deductible. Drugs prescribed by a doctor and pregnancy test kits may also be deducted along with lab fees.
 

There are more deductions after you become pregnant.

After you have become pregnant, you will be able to add the costs of your ongoing medical care to the list of potential deductions, as well as the cost of any inpatient medical care at a hospital or similar institution. All travel essential for you to receive medical care before, during, and after your pregnancy can also be added to the list, including a deduction for driving your own vehicle during 2022 and 2023 at the following rates:

• 2022 - 18 cents per mile for January through June, and 22 cents per mile for July through December
• 2023 - 22 cents per mile for the entire year

There are also possible tax deductions after the baby's birth.

Your expenses related to the birth of your child may also be included in your list of deductions and the same applies to breast pumps and other supplies to assist with lactation. Post-natal medical expenses for both mother and child are also potential deductions.

All of the deductions we have just discussed fall under the heading of medical expenses for the whole family that are deducted on the form Schedule A, Itemized Deductions on your Form 1040 tax return. But there are two conditions that must be met before you can use Schedule A to claim all these deductions:

• First, you can only claim the amount of your total out-of-pocket medical expenses that exceed 7.5% of the adjusted gross income (AGI) you report on Form 1040.
• Secondly, it is only worthwhile for you to file Schedule A if the total of your expenses for the year for state and local taxes, mortgage interest, charitable contributions, and medical expenses above 7.5% of your AGI exceeds $19,400 if you are filing as Head of Household (HOH) for 2022, or $25,900 if you are using the status of Married Filing Jointly (MFJ). (For 2023 the corresponding figures are $20,800 for HOH and $27,700 for MFJ).

For example, Joanna is filing jointly for 2023 with her husband Chip, and their AGI is $100,000. The couple paid a total of $22,000 in state and local taxes, mortgage interest, and charitable contributions during the year. They welcomed a new baby in October and kept careful records of all the out-of-pocket medical expenses of the family, which added up to a total of $30,000. Their expenses for the purposes of Schedule A are thus:

$22,000 (state and local taxes, mortgage interest, and charitable contributions)

$22,500 (medical expenses greater than 7.5% of $100,000 AGI)

$44,500 (total expenses for Schedule A)

This figure of $44,500 exceeds the $27,700 threshold for their filing status, which means that Joanna and Chip will be able to deduct their baby-related and other medical expenses using Schedule A for 2023.

It is important to note that accurate and thorough record-keeping is critical to determining whether or not you will be able to claim your baby expenses, in addition to the medical expenses of your other dependents.

There are also other tax benefits that you may qualify for after your baby is born, regardless of your medical expenses related to the child. These benefits are beyond the scope of this article but, for example, in 2023, your new baby may allow you to qualify for a Child Tax Credit of $2,000. At the time of writing, this tax credit would remain available every year until the baby reaches the age of 17.

To summarize, there are a number of tax benefits available related to your baby and any other children you may have. And so, I hope this article will be of some comfort to you on those nights when you are pacing the floor at 2am trying to get your little tax deduction back to sleep!