Imagine a world without dental braces – a world where crooked smiles never find their straight line, where bite issues persist unchecked. Thanks to Pierre Fauchard, a pioneer in modern dentistry, we’ve been graced with the gift of braces for nearly three centuries. But the burning question remains, should we pay taxes on these indispensable dental devices?
The tax implications of braces hinge on whether they’re deemed medically necessary or purely cosmetic. In the grand scheme of tax obligations, it’s crucial to pay the right amount, and equally important to leverage legal deductions, like the 7.5% threshold for braces.
The only things certain in life are death and taxes.
– Benjamin Franklin
Demystifying Tax Deductible Medical Expenses
Did you know the IRS allows deductions for certain medical expenses on tax returns? This includes dental expenses that exceed 7.5% of your Adjustable Gross Income (AGI). Whether it’s expenses for yourself or a dependent, they often qualify and can be lumped together with dental costs on your tax return.
Tax deductible medical expenses also encompass dental costs, thereby increasing the likelihood of a tax deduction. These expenses may include payments to doctors, dentists, surgeons, inpatient care, outpatient care, and even prescribed medications or treatments.
Your dental expenses, including payments for cleanings, check-ups, treatments, and braces, can be included in your tax return. Prescription items or drugs are also deductible, along with all other medical expenses for the year.
Unraveling the 7.5% Threshold
If you or a dependent has seen the inside of a hospital or dental office during the tax year, save those receipts! The IRS has a 7.5% threshold on medical expenses, including dental costs, that allows you to claim these expenses.
For example, if your adjusted gross income is $40,000, anything above the first $3,000 of medical bills can be deducted. So, if you’ve racked up $10,000 in medical bills – perhaps for consultations, surgeries, or braces – you’ll only pay tax on $3,000 or 7.5% of the total. This makes $7,000 of your total medical expenses tax deductible.
Can Braces be Considered Tax Deductible?
Medical and dental expenses cover a broad spectrum, and while most of these expenses are tax deductible, there are exceptions. If your braces are for medical purposes, they qualify for the 7.5% threshold, reducing your overall tax return. However, cosmetic orthodontic services like cosmetic braces and Invisalign are not tax deductible.
If you’re uncertain whether your braces are tax deductible, consider their purpose. If you’re straightening your teeth to improve your bite or alleviate pain or inflammation, these braces are medical. But if the braces are purely for aesthetic improvements, they’re not tax deductible.
How to Claim Your Tax Deduction
Claiming deductions can vary depending on whether you’re an individual or a business. The official procedures for tax deductions are outlined on the IRS website. Deductions for medical reasons can be found on Schedule A, the section for itemized expenses.
Remember, to itemize your tax deductions on Schedule A, you need to have a record of them and provide receipts and proper documentation as proof. If you have any dependents or a spouse, their receipts need to be kept too.
Filing a tax return with the IRS has become much simpler due to digital advancements. Simply visit the IRS website, create an account, and follow the provided guidelines and resources to prepare and submit your return. This ensures you pay the correct tax each year.
Considerations and Limitations
The IRS offers a variety of deductions for your tax return, but there are limitations. For instance, an overall limit of $10,000 for combined tax deductions for an individual includes medical and dental expenses. This limit is halved to $5,000 for married individuals.
Most orthodontic treatments are tax deductible under IRS guidelines. Typically, your dental health expenses are tax deductible, even teeth whitening. However, cosmetic procedures and whitening may not qualify.
Your tax return must also account for any insurance reimbursement payments made during the previous year. Any payments or credits made for deductible medical costs to you or to a hospital or physician must be included in your final tax assessment.
Understand the criteria for deducting the cost of braces on your tax return and how to calculate your potential savings.
Resources and Tools
Calculating your tax return deductions for medical expenses can be straightforward with the tax deductions calculator available on the IRS website. Leverage these resources to ensure you’re paying the correct amount of tax.
But the IRS isn’t your only resource. Visit the American Dental Association’s resources for additional information and access to their tax deduction calculators for returns.
Tax returns can be a complex maze, but with the right information, they become a navigable path. Bear in mind that you can always deduct medical and dental costs over the threshold amount unless they’re for cosmetic treatments. If you’re unsure, consult with your dentist and consider hiring a tax professional to ensure your taxes are in order.
Perry heads up a dynamic marketing team that has help the leading orthodontic practices in the USA 10X their business for over a decade. He’s a tea connoisseur, avid reader, traveling and grower of exotic fruits in his permaculture food forest.