The middle of tax season can be a scary time - especially with all of the changes we've been reading about in the news. With various iterations of tax bills making headlines in the last year, it can be difficult to know what actually applies to you. But for women - especially for pregnant women - one of the most important things to know about your taxes this year is that the medical expense deduction has been extended. So if medical bills have been a significant outgoing for you, it's time to look at the numbers and figure out how you should handle your deductions. It can make a huge difference - in 2015, around 8.8 million Americans used the medical expense deduction, saving about $86.9 billion. And 49 percent of those using it had an annual income below $50,000 and huge medical expenses, so it's a crucial deduction for many families.
Is It Worth It For You?
The most important thing to know about the medical expense deduction is that you can only receive it if you itemize your deductions, instead of just claiming the standard one. That means that, for it to be worth it, your itemized deductions should exceed the standard deductions. Up until 2026, this means that for a single person your deductions would have to exceed $12,000, for married couples they would have to exceed $24,000, and for single parents who are filing as the head of a household, the threshold is $18,000. These numbers are basically double what they were previously, so it will likely only affect people with very high medical bills - but those people will probably really need it.
If that sounds like you, then you may want to take a close look at your medical bills. If they make up more than 7.5 percent of your gross income (rising back to 10 percent after the tax year for 2018) then itemized deductions may be the better route. So keep that in mind when you're filing and, if there are any doubts, talk to an accountant.
How Women Can benefit
Being a woman is expensive - and so are medical bills. Luckily, there is a huge range of deductions you may not realize fall under the medical deduction category. вЂњThe IRS allows you to deduct preventative care, treatment, surgeries and dental and vision care as qualifying medical expenses,вЂќ TurboTax explains. вЂњYou can also deduct visits to psychologists and psychiatrists. Prescription medications and appliances such as glasses, contacts, false teeth and hearing aids are also deductible.вЂќ
For most people these expenses might not add up to much during the year - but if you've had an accident or acute illness then, even if you have good insurance, bills can quickly shoot up to the thousands. So knowing what you can deduct is crucial. You may also be able to deduct part of the travel costs of getting to and from appointments. Unfortunately things like non-prescription drugs (except insulin), toiletries, and gym memberships, don't make the cut.
What Pregnant Women Can Deduct
If you're pregnant, there are a lot of things that fall under the medical expense umbrella that you might not realize. Not only can you include all of your checkups during pregnancy and deduct a portion of the cost, you may also be able to include the cost of getting there and back again - so talk to your accountant. The same goes for any tests that are meant to ensure proper development and check on the health of the fetus, such as maternal serum tests, hCG testing, chorionic villus sampling, or amniocentesis. So, as long as you have records with clear receipts, you could have some major deductions.
Another point to remember is that some of the supplies that you buy related to the baby can be deducted. Not diapers (unfortunately) but if you've been stocking up on medication or prenatal vitamins, those should fall under the medical expense umbrella, according to H&R Block. Medical expenses add up quickly, so make sure that your taking full advantage of the deductions. Even if you have good insurance, the amount that you've paid out of pocket may be high enough that it's worth forgoing the standard deduction for something more cost-effective.
Other Major Deductions
Obviously, it's not just medical deductions that can come off of your taxes, so if you're self-employed, have a lot of outgoings, or just aren't sure - make sure you talk to an accountant. There are a lot of deductions that might surprise you, like social security contributions for the self-employed, tax savings for teachers, expenses if you're looking for work and more. A little bit of research can save you a lot of cash.
See more: What To Do If Your Partner Is Bad With Money
Working out your taxes can feel light a nightmare - so don't be afraid to get some help. An accountant or even one the many tax-filing websites can help you untangle the tax code and find out what makes the most sense for you. But make sure you don't overlook the medical expenses deduction. Pregnant women or anyone with overwhelming medical bills may be able to benefit. It's one of the only breaks this tax code gives to most of us, so use it to your advantage.