Are braces a tax write-off?

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#1 Post by **ACoach78** » Sun Dec 23, 2007 10:02 pm

Hey, does anyone know if I can write-off the expenses associated with my braces for this year when I file my taxes?

It was a referred thing by the dentist, of course.

Can anyone shed any light on how that works? Do we have any accountants here?

Thanks!

#2 Post by **Robin8** » Sun Dec 23, 2007 11:19 pm

It depends on where you live & which tax system you're under.

In U.S. and Canada, the answer is yes. In general, you report the medical & dental expenses on your tax form as required by the tax rules. In both cases, your expenses have to exceed certain threshold amount before they can be deducted (e.g. in U.S., it's 7.5% of your adjusted gross income)

For more details on how to report them, you can google CRA or IRS medical expenses or follow the links below ...

Canada CRA ...http://www.cra-arc.gc.ca/tax/individual ... ble-e.html

U.S. IRS ... http://www.irs.gov/publications/p502/ar02.html

Robin

#3 Post by **mayday** » Mon Dec 24, 2007 10:46 am

So, to get this straight...you have to pay off your treatment completely before you can claim it on your taxes?

#4 Post by **Robin8** » Mon Dec 24, 2007 11:52 am

No, you don't have to pay off your treatment completely before you can claim it on your taxes. You claim for what you paid during the year.

Here's info per IRS Pub520:

What Expenses Can You Include This Year?
You can include only the medical and dental expenses you paid this year, regardless of when the services were provided. (But see Decedent under Whose Medical Expenses Can You Include, later, for an exception.) If you pay medical expenses by check, the day you mail or deliver the check generally is the date of payment. If you use a â€œpay-by-phoneâ€

#5 Post by **Robin8** » Mon Dec 24, 2007 12:13 pm

Cowphee, you may want to do a quick calculation to see if it's to your advantage to pay off the whole treatment in one year, instead of spreading it over a few years. This is because you can only claim the amount of your medical and dental expenses that is more than 7.5% of your adjusted gross income (Form 1040, line 38).

Here's an example provided by IRS in Pub520:

"Your adjusted gross income is $40,000, 7.5% of which is $3,000. You paid medical expenses of $2,500. You cannot deduct any of your medical expenses because they are not more than 7.5% of your adjusted gross income."

So if your total treatment is $5,000 and you pay it all off in one year (intead of paying $2,500 for 2 years), then you can deduct $2,000. If your tax rate is 20%, your tax savings would be $400 or $2000 x 20%. Of course, you have to factor in the interests on $2500 and whether you want to pay for the whole treament before it's done.

Robin.

#6 Post by **Robin8** » Mon Dec 24, 2007 12:20 pm

Oops ... adjusted gross income is on line 38 of the tax return Form 1040.

Don't forget to include all other dental & medical expenses you paid for during the year in your calculation. You may also claim expenses you paid for your spouse or dependents.

Robin.

#7 Post by **adultbraces** » Mon Dec 24, 2007 12:43 pm

Approximately how much % of treatment in tax return are we talking about?

#8 Post by ***Denise*** » Tue Jan 01, 2008 7:24 pm

Meryaten wrote:As far as I understand it, in terms of the US regulations, medical expenses would just be one of your line item deductions - so you can only take advantage of this if you itemise. (And only if, as Robin noted, your qualifying medical expenses exceed 7.5% of your adjusted gross income) So how much you save depends on your "tax bracket" and whether you already had sufficient deductions to justify itemising instead of taking the Standard Deduction.

Here's a useful linky: http://www.irs.gov/taxtopics/tc502.html

(Robin will doubtless correct me if I am wrong )

Thanks for the info!

#9 Post by **BrandonH** » Tue Jan 01, 2008 9:22 pm

My bank just went to the high deductible insurance, including HSA (Health Savings Account). The bank is contributing $1000 per year to the HSA.

Since I never go to the doctor, I'm using that $1000 per year to pay for my braces. Adult ortho is an approved use of the HSA funds.

I get my tax base reduced as much as $2900 per year thanks to this.

#10 Post by **mottsrods** » Wed Jan 02, 2008 8:44 am

To all who is reading this thread........I can't express enough........mileage!mileage!mileage............this is what got us over that marker........Anytime you or anyone in your household goes to the doctor, record the mileage to and from.........it adds up........I know....

Mott