IVF and taxes

[buliej]

Hi

I am getting mixed information and was wondering if anyone has talked to an accountant about what is and isn't claimable (don't worry, I'm not taking any thing anyone says as "tax advice"). Once you meet the safety net threshold, my understanding is all medical expenses you spend above the safety net amount (I think the safety net is $1500) are claimable on your tax statement.

I have a couple questions about this - what about DH's medical expenses? the $1500 safety net is calculated on a family basis, so once we reach this, then are DH's out of pocket costs deductible as well? on whose tax form? I would like to take them all on mine as I'm the one with the large medical expenses and our incomes are fairly equal. My accountant seemed to think that this isn't how it works and that he would ALSO have to be out of pocket $1500 and then he could claim his own medical expenses. He probably won't meet this expenditure although he has had some medical expenses. This also requires that as a family we be out $3000 ($1500) each before both of our expenses are deductible and this doesn't feel right to me.

What about accupuncture? naturopath? herbs? Although accupuncture was not "prescribed" by my FS, the clinic, when it does it's introductory presentation to all new patients suggests it as a way of dealing with ivf-related stress. What about vitamins - especially where the FS told us to take certain things? OR the GP telling you to start taking pre-conception vitamins?

I know these are complicated questions - but I'm trying to at least get my head around some of this stuff. I don't want to go through the hassle of calculating all these numbers only to find out we can't use them.

Thanks.

[butterfly_warrior]

I'm a little foggy on all of this myself, but I understand that the medicare safety net is completely independent of and different to the tax thing. I'm not sure how it all works with partners as for the one year we have done (we're a bit behind in our taxes at the moment) we really only worried about mine. $16k of stuff gone through medicare and $12k back - increased my tax refund by about $800.

I understand that prescription medicines do count, but I'm still trying to find an answer with regards to OTC medications (unprescribed) and things like herbs/vitamins purchased somewhere other than a chemist. I also haven't got a clue how it works with the medical expenses of other family members... if we ever get our act together and get the three years of outstanding taxes done, I should be able to find out.

One thing I did like, my tax agent is quite happy for us to include the freezing and storage fees for our frozen embryos in the medical expenses we can claim.

BW

[Manhattan]

I'll try and put it as simply as I can for you

-Add up all yours and your DH's medical expenses for the year eg: 20k
-Subtract any refunds you received from Medicare or PHI eg: 15k
-From this amount, subtract $1500 eg: 5k-1500 = 3500
-Multiply this by 20% to calc the rebate eg: 3500*20% = 700

You can choose to claim this amount in either your return or your DH's. Generally, if someone is payable, you would include it in theirs to reduce the amount of tax they owe to the ATO. Your accountant has is wrong, you do a joint claim, and put it in whichever return is most beneficial for you.

You can only claim prescription medicine, so vitamins unfortunately dont make the cut. Acupuncture/herbs etc are contentious. They are not a medical treatment as such, and not provided by actual medical practioners. Anything IVF related, cycles, drugs, storage etc can be claimed.

HTH

[redlady]

Hi buliej,

My husband is an accountant and I could get him to look at this post when he gets home from work if you like?

Redlady

[infinity]

Hi buliej,

I'm a tax accountant (don't hate me lol!).

The 'medical expenses rebate' is a tax rebate and seperate/different from medicare safety net. The rebate works like this - once you spend over $1500 in out-of-pocket medical expenses you are entitled to a tax rebate of 20% of those expenses over $1500. Out-of-pocket being eligible medical expenses that have not been refunded by medicare or private health insurance. So if you are out of pocket $2000 in a financial year your rebate is $500 (the excess over $1500) x 20% ($100). This $100 comes off your tax payable.

In one person's return you can group all eligible medical expenses for the family - so when making your calculation include DH's eligible medical expenses too. You can do this on either of your tax returns, but keep in mind the rebate only reduces tax payable to nil - it will not provide an extra refund of any excess over tax payable.


Prescription medications do count. Over the counter vitamins, creams etc do not count, nor do 'medicines' from health care shops.
I claim my acupunture as my acupuncturist is a licensed medical pratitioner - but cannot claim the herbs. You can claim for therapeutic treatment but only if it at the direction of a doctor. This means a referral from your IVF doctor to a particular person for treatment. The suggestion or advice of your IVF doctor is not enough. I would think your naturopath and herbs are not 'eligible' medical expenses.

hope this helps a little. Happy for you to PM me if you have more questions

[buliej]

WOW - thanks everyone - these posts are really helpful. Once I go through my actual receipts, I may have more questions (esp. if my tax accountant takes a different view).

Redlady - it can't hurt to get someone else's view if you don't mind asking your husband to think about taxes during his free time!

Infinity - I'm a lawyer - I think lawyers are disliked more than accountants!

[Bengal]

Hi buliej,

I'm a tax accountant (don't hate me lol!).

You can claim for therapeutic treatment but only if it at the direction of a doctor. This means a referral from your IVF doctor to a particular person for treatment. The suggestion or advice of your IVF doctor is not enough. I would think your naturopath and herbs are not 'eligible' medical expenses.

Infinity, what would be an example of a therapeutic treatment apart from accupuncure?

Gosh ... everyone is accountant's and lawyers, now all we need is a FS ...

[infinity]

Hi WLB,

My understanding is that the ATO is referring to treatments like acu, chiro, rehabilitation, psychiatrists, - that type of thing - referred by your doctor as part of treating your illness.

Did you have something specific in mind? I can check it out for you if you want me to? PM me if you need to.

[briggsy's girl]

i have claimed this the past couple of years - my understanding is that any appt you make with an "alternative" therapist (chiro, naturopath, accu) isn't covered UNLESS it's referred by a medical practitioner. so, in the case of IVF, if your FS says you need accu to help you out, you can't just go and make an appointment, they have to refer you (and oversee the treatment - meaning there would be letters back and forth from FS to AP updating on progress etc) - if you go to AP on the recommendation of the FS WITHOUT him referring and overseeing the treatment, you won't get the rebate.

my FS suggested i try AP for a cycle when i asked for alternatives to help us out - that cycle was successful - the AP cost several hundred dollars out of pocket, but wasn't referred by the FS so couldn't be claimed on the net medical expenses thing.